Morgan Stanley To Purchase Remaining 35% Stake In MSSB

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Morgan Stanley To Purchase Remaining 35% Stake In MSSB

Morgan Stanley (NYSE:MS) said in a statement that it has received the Federal Reserve’s approval to buy the remaining 35 percent stake in Morgan Stanley Smith Barney Holdings from Citigroup Inc (NYSE:C). The deal is expected to be closed by the end of this month. After the deal, Morgan Stanley will own the entire 100 percent of the brokerage business, which now operates as Morgan Stanley Wealth Management.

Morgan Stanley To Purchase Remaining 35% Stake In MSSB

Morgan Stanley to Pay $4.7 Billion

The New York-based bank’s CEO James Gorman said that he will notify Citigroup Inc (NYSE:C) that Morgan Stanley (NYSE:MS) intends to pay the previously agreed $4.7 billion in cash for the remaining stake. The Federal Reserve approved the deal after its annual stress test showed that it’s James Gorman-led bank has enough capital to move forward.

The brokerage venture was created in 2009 by combining Citigroup Inc (NYSE:C)’s Smith Barney division with the Dean Witter franchise. Morgan Stanley (NYSE:MS) acquired a majority stake in the venture during the financial crisis. Gorman said that his bank has focused its entire energy on finalizing the Smith Barney deal. Buying a controlling stake proved beneficial for Morgan Stanley as its wealth management unit is now the world’s largest brokerage. It has $1.79 trillion of AUM and 16,284 financial advisers worldwide, according to Michael J. Moore of Bloomberg. It now accounts for about 50 percent of Morgan Stanley’s total revenues.

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