Morgan Stanley’s $13 Billion Acquisition of E*TRADE Financial Corporation


Davis Polk advised Morgan Stanley, while Skadden advised E*TRADE Financial Corporation on the deal.

Morgan Stanley (NYSE: MS) and E*TRADE Financial Corporation (NASDAQ: ETFC) have entered into a definitive agreement under which Morgan Stanley will acquire E*TRADE, a leading financial services company and pioneer in the online brokerage industry, in 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 will create a leading player in Workplace Wealth, combining E*TRADE’s leading U.S. stock plan business with Shareworks by Morgan Stanley, a top provider of public stock plan administration and private cap table management solutions. 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.

Morgan Stanley is a leading global financial services firm providing a wide range of investment banking, securities, wealth management and investment management services.

E*TRADE Financial and its subsidiaries provide financial services including brokerage and banking products and services to traders, investors, stock plan administrators and participants, and registered investment advisers (RIAs).

The Davis Polk team included Managing Partner Neil Barr (Picture), corporate partners Marc O. Williams and Brian Wolfe and associates Michael Senders and Lucas Wozny. Partner Kyoko Takahashi Lin provided executive compensation advice. Partner Arthur J. Burke provided antitrust and competition advice. Partner Michael Mollerus provided tax advice. Partner Luigi L. De Ghenghi and counsel Zachary J. Zweihorn provided financial institutions advice.

The Skadden team included M&A partners Stephen Arcano (New York), David Hepp (New York), Sven Mickisch (New York) and counsel Dohyun Kim (New York); Executive Competition and Benefits partner Joseph Penko (New York); Tax partner Edward Gonzalez (New York); Financial Institutions Regulation and Enforcement partner Brian Christiansen (Washington, D.C.); Investment Management partner Heather Cruz (New York); and Antitrust/Competition partner Kenneth Schwartz (New York).

Involved fees earner: Neil Barr – Davis Polk & Wardwell; Arthur Burke – Davis Polk & Wardwell; Luigi De Ghenghi – Davis Polk & Wardwell; Michael Mollerus – Davis Polk & Wardwell; Michael Senders – Davis Polk & Wardwell; Kyoko Takahashi Lin – Davis Polk & Wardwell; Marc Williams – Davis Polk & Wardwell; Brian Wolfe – Davis Polk & Wardwell; Lucas Wozny – Davis Polk & Wardwell; Zachary Zweihorn – Davis Polk & Wardwell; Stephen Arcano – Skadden Arps Slate Meager & Flom; Brian Christiansen – Skadden Arps Slate Meager & Flom; Heather Cruz – Skadden Arps Slate Meager & Flom; Edward Gonzalez – Skadden Arps Slate Meager & Flom; David Hepp – Skadden Arps Slate Meager & Flom; Dohyun Kim – Skadden Arps Slate Meager & Flom; Sven Mickisch – Skadden Arps Slate Meager & Flom; Joseph Penko – Skadden Arps Slate Meager & Flom; Kenneth Schwartz – Skadden Arps Slate Meager & Flom;

Law Firms: Davis Polk & Wardwell; Skadden Arps Slate Meager & Flom;

Clients: E*TRADE Financial Corporation; Morgan Stanley;

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Author: Ambrogio Visconti