Morgan Stanley is buying E-Trade for $13 billion

Morgan Stanley, the tony investment bank for rich Americans and corporations, will acquire brokerage firm E-Trade for $13 billion, the companies announced Thursday. The Wall Street investment giant will pay $58.74 a share in stock for E-Trade in a deal bringing together $3.1 trillion in client assets.

The deal, which is expected to close in the fourth quarter, follows last year’s $26 billion all-stock purchase of TD Ameritrade by Charles Schwab. Morgan Stanley shares fell about 3% on the proposed purchase, the biggest takeover by a U.S. bank since the financial crisis. E-Trade shares jumped more than 24% to $55.90 per share.

“E*TRADE represents an extraordinary growth opportunity for our Wealth Management business and a leap forward in our Wealth Management strategy,” Morgan Stanley Chairman and CEO James Gorman said in a statement. “In addition, this continues the decade-long transition of our Firm to a more balance sheet light business mix, emphasizing more durable sources of revenue.”