Morgan Stanley on track to close E*TRADE deal in Q4 2020

Morgan Stanley (NYSE:MS) appears to be firm regarding its deal with E*TRADE Financial Corporation (NASDAQ:ETFC), with the transaction on track to be completed in the final quarter of 2020.

Jonathan M. Pruzan (Morgan Stanley’s CFO, Head of Corporate Strategy and Executive Vice President) made the following comment during a Morgan Stanley Earnings Conference Call held on April 16, 2020:

“With respect to our intent to acquire E*TRADE, the HSR waiting period has expired. We filed our application with the Federal Reserve in March, and we will soon file the proxy statement/prospectus. E*TRADE will hold the shareholder vote this summer, and we remain on track to close the transaction in the fourth quarter.”

As FinanceFeeds reported in February 2020, Morgan Stanley and E*TRADE Financial Corporation entered into a definitive agreement under which Morgan Stanley will acquire online brokerage E*TRADE.

This is an all-stock transaction valued at approximately $13 billion. Under the terms of 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 February 19, 2020.

The transaction is poised to create a leading player in Workplace Wealth, combining E*TRADE’s U.S. stock plan business with Shareworks by Morgan Stanley. This combination will enable Morgan Stanley to accelerate initiatives aimed at enhancing the workplace offering through online brokerage and digital banking capabilities, providing a significantly enhanced client experience.

E*TRADE also provides a full suite of digital banking services, including direct integration with brokerage accounts, checking and high-yield savings accounts, significantly accelerating Morgan Stanley’s digital banking efforts. The transaction adds approximately $56 billion of low-cost deposits, which will provide substantial funding benefits to Morgan Stanley.