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Morgan Stanley to Buy E*TRADE in $13 Billion Acquisition

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Broadening its reach across channels and further boosting M&A dealmaking activity, Morgan Stanley announced that it has entered into an agreement to purchase E*TRADE Financial Corporation in an all-stock transaction valued at approximately $13 billion. 

E*TRADE reportedly has over 5.2 million client accounts with more than $360 billion of retail client assets. When combined with Morgan Stanley’s existing book of business, the transaction would result in $3.1 trillion in client assets, 8.2 million client accounts and 4.6 million stock plan participants. The acquisition also allows Morgan Stanley to enhance its workplace offerings through online brokerage and digital banking capabilities, according to the announcement. 

“E*TRADE represents an extraordinary growth opportunity for our Wealth Management business and a leap forward in our Wealth Management strategy,” Morgan Stanley Chairman and CEO James Gorman stated. “The combination adds an iconic brand in the direct-to-consumer channel to our leading advisor-driven model, while also creating a premier Workplace Wealth provider for corporations and their employees.” 

Under the agreement, E*TRADE stockholders will receive 1.0432 Morgan Stanley shares for each E*TRADE share, which represents per share consideration of $58.74 based on the closing price of Morgan Stanley common stock on Feb. 19, 2020. 

The acquisition is subject to approval by regulators and E*TRADE shareholders, and is expected to close in the fourth quarter of 2020.