Morgan Stanley closes acquisition of Eaton Vance

Morgan Stanley has closed its acquisition of Eaton Vance Corp. in a cash-and-stock deal for an equity value of about $7 billion.

Eaton Vance common shareholders were offered 0.5833 of a Morgan Stanley common share and $28.25 per share in cash for each Eaton Vance common share, with the opportunity to choose to receive the consideration in all cash or all stock. Eaton Vance shareholders also received a special dividend of $4.25 per share, which was paid Dec. 18, 2020, to shareholders of record as of Dec. 4, 2020.

Eaton Vance Chairman and CEO Thomas Faust Jr. will become chairman of Morgan Stanley Investment Management Inc. and will join Morgan Stanley's management committee.

Morgan Stanley will now oversee $5.4 trillion of client assets across its wealth management and investment management segments with the addition of Eaton Vance.

At the time of announcement in October 2020, the deal was expected to close in the second quarter and be breakeven to EPS immediately and marginally accretive after, with fully phased-in cost synergies, and add about 100 basis points to return on tangible common equity.

Morgan Stanley's acquisition of Eaton Vance was the second-largest announced financial services M&A deal in 2020, after its $13 billion deal for E*TRADE Financial.

Interest in deal-making in the asset management space has been increasing, with large banks such as JPMorgan Chase & Co. and Goldman Sachs Group Inc. expressing interest in buying asset management businesses and Wells Fargo & Co. looking to exit the space.