Morgan Stanley to acquire Eaton Vance for $7bn

Written by Adam Cadle

09/10/2020

Morgan Stanley is to acquire Eaton Vance, a provider of advanced investment strategies and wealth management solutions with over $500bn in assets under management (AUM), for an equity value of approximately $7bn.

Morgan Stanley Investment Management will almost double in size to $1.2trn in assets with the purchase of Eaton Vance

Morgan Stanley said "the combination will better position the firm to generate attractive financial returns through increased scale, improved distribution, cost savings of $150m – or 4% of MSIM and Eaton Vance expenses – and revenue opportunities".

Under the terms of the merger agreement, Eaton Vance shareholders will receive $28.25 per share in cash and 0.5833x of Morgan Stanley common stock, representing a total consideration of approximately $56.50 per share. Based on the $56.50 per share, the aggregate consideration paid to holders of Eaton Vance’s common stock will consist of approximately 50% cash and 50% Morgan Stanley common stock.

“Eaton Vance is a perfect fit for Morgan Stanley,” James Gorman, chairman and chief executive officer, Morgan Stanley, said.

“This transaction further advances our strategic transformation by continuing to add more fee-based revenues to complement our world-class investment banking and institutional securities franchise. With the addition of Eaton Vance, Morgan Stanley will oversee $4.4trn of client assets and AUM across its wealth management and investment management segments.”

The acquisition is subject to customary closing conditions, and is expected to close in the second quarter of 2021.

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