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Morgan Stanley to Acquire E*Trade for $13 Billion

Morgan Stanley to Acquire ETrade

Morgan Stanley will become a leader in all major wealth management channels by acquiring E*Trade

New York: Morgan Stanley entered into a definitive agreement with E*Trade, a leading financial services company and pioneer in the online brokerage industry under which the company will acquire E*Trade in an all-stock transaction valued at approximately $ 13 billion. According to the terms of the agreement Morgan Stanley will pay $58.74 a share in stock for E*Trade in a deal bringing together $ 3.1 trillion in client assets. The acquisition is expected to be completed by the fourth quarter of 2020.

The Chairman & CEO of Morgan Stanley said, “E*Trade represents an extraordinary growth opportunity for our Wealth Management business and a leap forward in our Wealth Management strategy. 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. In addition, this continues the decade-long transition of our Firm to a more balance sheet light business mix, emphasizing more durable sources of revenue”.

The CEO of E*Trade further said that, “Since we created the digital brokerage category nearly 40 years ago, E*Trade has consistently disrupted the status quo and delivered cutting-edge tools and services to investors, traders, and stock plan administrators. By joining Morgan Stanley, we will be able to take our combined offering to the next level and deliver an even more comprehensive suite of wealth management capabilities. Bringing E*Trade’s brand and offerings under the Morgan Stanley umbrella creates a truly exciting wealth management value proposition and enables our collective team to serve a far wider spectrum of clients.”

According to TechSci Research, the acquisition will increase the wealth management scale of Morgan Stanley and fill the gaps in products & services segment by complementary offerings and enhanced digital capabilities of E*Trade. The wealth management division of Morgan Stanley will grow since it will be able to attract young, less affluent customers on account of the lower margins associated with digital wealth management solutions. E*Trade’s strong deposit base will also help Morgan Stanley raise deposits to fund loans to its wealthy clientele.

According to a recently published report by TechSci Research, “Global Transaction Monitoring Market By Component (Solution Vs Services), By Application (AML, FDP, & Others), By Function (Case Management, KYC/Customer Onboarding, & Others), By End-Use (Retail, BFSI, Government, Defence, & Others), By Deployment Mode (On-premises Vs Cloud), By Organization Size (Small & Medium-sized Enterprises & Large Enterprises), By Region, Competition, Forecast & Opportunities, 2024”, the global transaction monitoring market is anticipated to grow at a CAGR of around 15% during the forecast period. The global transaction monitoring market was valued at over $ 8 billion in 2018 and is expected to witness robust growth through 2024 on account of increasing requirement to manage KYC compliance. Moreover, corruption along with terrorist financing are some of the major concerns for global organizations and major economies. These issues result in increasing terrorist activities, drug smuggling and other illegal activities. Therefore, the organizations are shifting their focus towards deploying various security solutions to restrict criminals from money laundering, which shuts off cash flow and helps reduce criminal activities.

According to another recently published report by TechSci Research, “Global Peer to Peer Lending Market By Business Model (Traditional P2P Model & Marketplace Lending Model), By End User (Consumer Credit; Small Business; Student Loans & Real Estate), By Region (North America, Europe & Others), Competition, Forecast & Opportunities, 2024”, the global peer to peer lending market was valued at around $ 15 billion in 2018 and the market is poised to grow at CAGR of over 19% to surpass $ 44 billion by 2024 due to increasing number of borrowers. Peer to peer lending market allows borrowers to directly interact with the lender through the P2P lending platform. Use of such platforms helps to reduce costs by excluding operational expenses such as cost of staffing and maintenance, physical branches, among others, which is promoting the growth of the market. Moreover, advancements in the technology and low cost associated with operations is further driving the global peer to peer lending market. Nowadays, increasing student population is preferring loans at cheaper interest rate which is anticipated to promote the growth of peer to peer lending market until 2024. Additionally, increasing awareness pertaining to clearing personal debt as soon as possible is another reason for rising acceptance of peer to peer lending market, globally.

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