Morgan Stanley agreed to purchase Eaton Vance Corp. for about $7 billion in Chief Executive Officer James Gorman’s second major acquisition this year, both of which tilt the investment bank further toward the steadier business of money management.
Eaton Vance shareholders will receive a total cash-and-stock consideration of about $56.50 a share, Morgan Stanley said in a statement Thursday. That represents a 38% premium over Eaton Vance’s closing price Wednesday.
The E*Trade takeover was the industry’s biggest since the financial crisis saddled banks with regulations that hobbled some of their signature businesses. For much of the past decade, Gorman spent his time at the helm turning the bank into a major wealth-management player and shifting it away from its reliance on its trading and investment-banking operations. The latest acquisitions come at a time when those core Wall Street operations are minting money.
Eaton Vance shares surged 46% to $59.81 at 9:46 a.m. in New York, higher than the deal price. Morgan Stanley fell 1.2% to $48.12.
In trying to absorb an asset manager like Eaton Vance, the Wall Street firm is aiming to bulk up in a business whose lure of steady fees and low capital charges has attracted many big banks.