Morgan Stanley Closes Acquisition of Eaton Vance

Rhea-AI Summary

Morgan Stanley (NYSE: MS) has successfully completed its acquisition of Eaton Vance Corp., involving a mix of stock and cash. Shareholders of Eaton Vance received 0.5833 shares of Morgan Stanley and $28.25 in cash for each share, plus a special dividend of $4.25 paid on December 18, 2020. This strategic move aims to enhance Morgan Stanley's fee-based revenue, bringing total client assets under management to $5.4 trillion. The merger is expected to combine investment capabilities and distribution strengths, enhancing value for clients.

Positive

• Acquisition enhances fee-based revenue, strengthening the business model.
• Combined assets under management reach $5.4 trillion, boosting market position.
• Strategic integration anticipated to create significant value for investment management clients.

Negative

• None.

Morgan Stanley (NYSE: MS) announced today that it has completed the previously announced acquisition of Eaton Vance Corp. in a stock and cash transaction. Eaton Vance common stockholders were offered 0.5833 Morgan Stanley common shares and $28.25 per share in cash for each Eaton Vance common share, and had the opportunity to elect to receive the merger consideration all in cash or all in stock, subject to proration and adjustment. As provided under the merger agreement, Eaton Vance shareholders also received a special dividend of $4.25 per share, which was paid on December 18, 2020 to shareholders of record on December 4, 2020.

“This acquisition further advances our strategic transformation by continuing to add more fee-based revenues to complement our world-class, integrated investment bank. With the addition of Eaton Vance, Morgan Stanley will oversee $5.4 trillion of client assets across its Wealth Management and Investment Management segments. The Morgan Stanley Investment Management and Eaton Vance businesses are delivering strong growth and their complementary investment and distribution capabilities will deliver significant incremental value to our investment management clients,” said James P. Gorman, Chairman and Chief Executive Officer of Morgan Stanley.

Thomas E. Faust, Jr., Chairman and Chief Executive Officer of Eaton Vance, will become Chairman of Morgan Stanley Investment Management and will join the Morgan Stanley Management Committee.

“We are excited to welcome Eaton Vance. Our combined organization is exceptionally well positioned to deliver differentiated value to our clients and growth opportunities for our employees,” said Dan Simkowitz, Head of Morgan Stanley Investment Management.

”My Eaton Vance colleagues and I are pleased to join Morgan Stanley to begin the work of building the world’s premier asset management organization,” said Mr. Faust. “On a combined basis, Morgan Stanley Investment Management and Eaton Vance have unrivaled investment capabilities, distribution reach and client relationships around the globe.”

Morgan Stanley is a leading global financial services firm providing a wide range of investment banking, securities, wealth management and investment management services. With offices in more than 41 countries, Morgan Stanley’s employees serve clients worldwide, including corporations, governments, institutions and individuals. For further information about Morgan Stanley, please visit www.morganstanley.com.

Forward-Looking Statements

This press release may contain forward-looking statements, including the attainment of certain financial and other targets, objectives and goals. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made, which reflect management’s current estimates, projections, expectations, assumptions, interpretations or beliefs and which are subject to risks and uncertainties that may cause actual results to differ materially. Morgan Stanley does not undertake any obligation to update any forward-looking statements. For a discussion of risks and uncertainties that may affect the future results of Morgan Stanley, please see “Forward-Looking Statements” immediately preceding Part I, Item 1, “Competition” and “Supervision and Regulation” in Part I, Item 1, “Risk Factors” in Part I, Item 1A, “Legal Proceedings” in Part I, Item 3, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 and “Quantitative and Qualitative Disclosures about Market Risk” in Part II, Item 7A in Morgan Stanley’s Annual Report on Form 10-K for the year ended December 31, 2020 and other items throughout the Form 10-K, Morgan Stanley’s Quarterly Reports on Form 10-Q and Morgan Stanley’s Current Reports on Form 8-K, as well as the additional risk factors under “Risk Factors” in the Registration Statement on Form S-4 filed with the SEC on December 4, 2020, as amended.

CRC 3469144 03/2021

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FAQ

What were the terms of the Morgan Stanley and Eaton Vance acquisition?

Eaton Vance shareholders received 0.5833 Morgan Stanley shares and $28.25 in cash per share, along with a special dividend of $4.25.

How will the acquisition affect Morgan Stanley's assets?

Post-acquisition, Morgan Stanley will oversee $5.4 trillion in client assets across its Wealth Management and Investment Management segments.

Who will lead Morgan Stanley Investment Management after the acquisition?

Thomas E. Faust, Jr., former CEO of Eaton Vance, will become Chairman of Morgan Stanley Investment Management.

What is the strategic importance of the acquisition for Morgan Stanley?

The acquisition is aimed at enhancing fee-based revenues and combining investment capabilities, which is expected to deliver significant value to clients.