Morgan Stanley has entered into an agreement to acquire Eaton Vance, a money manager with more than $500 billion in assets under management. The deal has an equity value of approximately $7 billion and is expected to be completed by the second quarter of 2021. Morgan Stanley will oversee $4.4 trillion in client assets and assets under management once the deal is completed. This announcement comes shortly after Morgan Stanley completed its $13 billion acquisition of E-Trade.
According to Morgan Stanley CEO James Gorman, the acquisition of Eaton Vance advances Morgan Stanley's "strategic transformation by continuing to add more fee-based revenues[.]" Morgan Stanley also expects the deal to increase financial returns through an increased scale and improved distribution.
Eaton Vance shareholders will receive $28.25 in cash and 0.5833 shares of Morgan Stanley common stock per share of Eaton Vance stock. According to Bloomberg, the total compensation received by Eaton Vance shareholders will be $56.50, which is a 38% premium from Eaton Vance's share price. Eaton Vance shareholders will also receive a one-time dividend of $4.25 per share.
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