Morgan Stanley (MS) will buy E-Trade Financial (ETFC) in an all-stock deal valued at $13 billion as online brokers have cut stock and ETF trading commissions to $0.
The E-Trade deal comes on the heels of another major acquisition in the brokerage space. Last November, larger brokerage rivals Charles Schwab (SCHW) and TD Ameritrade (AMTD) agreed to merge in a $26 billion, all-stock deal.
Under the terms of the latest deal, Morgan Stanley will pay $58.74 per E-Trade share. The deal is expected to close in the fourth quarter.
"E-Trade represents an extraordinary growth opportunity for our wealth management business and a leap forward in our wealth management strategy," said Morgan Stanley CEO James Gorman, in the press release. "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."
The combined company will have $3.1 trillion in client assets 8.2 million retail client relationships and accounts, and 4.6 million stock plan participants, according to Morgan Stanley.
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