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March 28, 2020 at 03:06 PM
Details of the proposed merger presented by Morgan Stanley on Feb. 20, 2020.
Five weeks after Morgan Stanley said it planned to buy discount broker E-Trade for $13 billion, the Justice Department’s antitrust unit has approved the deal, according to a Bloomberg report of March 27 that cited a person familiar with the matter.
The E-Trade merger could bring some $360 billion of client assets to Morgan Stanley’s $2.7 trillion. (Both figures were reported at year-end 2019, so the current amounts are likely lower due to the market’s recent decline.) A Morgan Stanley spokesperson declined to comment on the report.
The news comes about 10 days after the Justice Department said that — due to the coronavirus and its impact on government operations — firms involved with mergers and acquisitions should add 30 days to their “deal timing agreements.”
Schwab Update
Meanwhile, Charles Schwab’s plan to buy TD Ameritrade for $26 billion and build an even larger firm is still under investigated by the Justice Department, Bloomberg reported. That deal involves two direct rivals in the RIA and discount retail brokerage space.
“In fact, Morgan Stanley acquisition of E*Trade and potential loss of E*Trade Advisor Services as a viable RIA custody competitor puts even MORE pressure on the #Schwabitrade deal,” tweeted popular blogger and planner Michael Kitces last month. “Only a coterie of small-RIA custody options left, and even fewer competitive choices for large RIAs.”
