Daily Management Review

Breaking Deal With E*Trade Would Cost Morgan Stanley ‘$375 million’


Morgan Stanley’s E*Trade acquisition could mark the biggest one by a major U.S. bank post the financial crisis of 2007-2009.

Source: flickr.com; (CC BY-ND 2.0) ©Insider Monkey; www.insidermonkey.com
Source: flickr.com; (CC BY-ND 2.0) ©Insider Monkey; www.insidermonkey.com
Morgan Stanley has informed that the bank will get “a $375 million breakup fee” in case E*Trade Financial Corp decides to withdraw from the “$13 billion deal for the discount brokerage”.
Last week, Morgan Stanley got into a deal for purchasing “E*Trade”, which marks the “biggest acquisition” of a Wall Street based major banks post the “2007-2009 financial crisis”.
It has been sometimes that speculations surrounding the merger and acquisition of E*Trade as been circulating, mainly following Charles Schwab Corp’s statement regarding the possible purchase option of TD Ameritrade Holding Corp.
In a regulatory filing, Morgan Stanley stated that in case the bank ends the said deal due to “antitrust issue”, E*Trade would be paid an amount of “$525 million”.According to Reuters:
“The bank expects to complete the deal by the fourth quarter, and executives expressed confidence that it would meet regulatory approvals”.