Morgan Stanley Completes Acquisition of Smith Barney Venture

Morgan Stanley (MS) completed its
purchase of a brokerage joint venture with Citigroup Inc.’s
Smith Barney, capping a four-year effort to more than double the
size of its wealth-management division.

Morgan Stanley purchased the 35 percent of the business it
didn’t own from Citigroup, the New York-based company said
yesterday in a regulatory filing. The firm said last week that
it would pay $4.7 billion and take a $200 million charge in the
second quarter related to the purchase.

Chief Executive Officer James Gorman, 54, struck a deal in
2009 to gain a controlling stake in the venture that merged
Morgan Stanley’s Dean Witter franchise with Citigroup’s Smith
Barney unit. The business, renamed Morgan Stanley Wealth
Management last year, is the world’s largest brokerage, with
$1.79 trillion in client assets and 16,284 advisers on March 31.

“This has been an incredibly challenging five-year period
not just for Morgan Stanley, but for our industry and the
country, frankly, and it’s exciting to be stepping forward with
something as dramatic as this acquisition,” Gorman said in a
video posted on the firm’s website. “Right now, what we need to
do is focus on making it work.”

To contact the reporter on this story:
Michael J. Moore in New York at
mmoore55@bloomberg.net

To contact the editors responsible for this story:
David Scheer at
dscheer@bloomberg.net;
Christine Harper at
charper@bloomberg.net

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Saturday, June 29th, 2013 EN

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