Published On: Fri, Oct 9th, 2020

Morgan Stanley to acquire investment management firm Eaton Vance

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Morgan Stanley acquisition of Eaton Vance : Investment banking giant Morgan Stanley has agreed to acquire Boston-based investment management firm Eaton Vance, in a cash-cum-stock deal worth $7 billion.

Eaton Vance offers advanced investment strategies and wealth management solutions to across the world. The company has more than $500 billion in assets under management (AUM).

According to Morgan Stanley, the acquisition takes it strategic transformation forward with three world-class businesses of scale, which include institutional securities, wealth management, and investment management.

Its investment management unit – Morgan Stanley Investment Management (MSIM) following the deal is expected to become a major asset manager with nearly $1.2 trillion of AUM and more than $5 billion of combined revenues.

Commenting on Morgan Stanley acquisition of Eaton Vance, James P. Gorman – Chairman and CEO of 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 $4.4 trillion of client assets and AUM across its Wealth Management and Investment Management segments.”

Morgan Stanley acquisition of Eaton Vance

Morgan Stanley acquisition of Eaton Vance. Photo courtesy of Ajay Suresh from New York, NY, USA/Wikipedia.org.

Morgan Stanley believes that MSIM and Eaton Vance are highly complementary having limited overlap in their capabilities in investment and distribution.

The investment bank said that Eaton Vance is a major player in key growth areas such as individual separate accounts, tailored investment solutions via its investment advisory services provider Parametric, and responsible ESG investing via its investment management subsidiary Calvert Research and Management.

Morgan Stanley, further said that Eaton Vance being a major provider of value-add fixed income solutions fills product gaps, while giving quality scale to the MSIM franchise.

The combination of MSIM and Eaton Vance is also expected to improve client opportunities, said Morgan Stanley by bringing Eaton Vance’s US retail distribution together with the global distribution of MSIM.

As per the terms of the deal, Eaton Vance shareholders will be paid $28.25 per share in cash and also issued 0.5833 of Morgan Stanley common stock. This represents a total consideration of around $56.50 per share for Eaton Vance.

Thomas E. Faust, Jr. – CEO of Eaton Vance, commenting on Morgan Stanley acquisition of Eaton Vance, said: “By joining Morgan Stanley, we will be able to further accelerate our growth by building upon our common values and strengths, which are focused on our commitment to investment excellence, innovation and client service.

“Bringing Eaton Vance’s leading brands and capabilities under Morgan Stanley creates a uniquely powerful set of investment solutions to serve both institutional and retail clients in the U.S. and internationally.”

The closing of Morgan Stanley acquisition of Eaton Vance, which is subject to customary closing conditions, is likely to be wrapped up in Q2 2021.

Earlier this month, Morgan Stanley completed its previously announced $13 billion acquisition of US electronic trading platform provider E*TRADE Financial.

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