#Morgan Stanley officially closes all-stock E*Trade takeover deal

Morgan Stanley has closed its acquisition of discount brokerage E*Trade, the investment bank announced Friday.

The all-stock deal — valued at $13 billion when it was announced in February — gives New York-based Morgan Stanley a new consumer-focused arm amid a boom in retail trading during the coronavirus pandemic.

“E*Trade has built a best-in-class, direct-to-consumer digital channel and a strong brand over the past 38 years,” Morgan Stanley chairman and CEO James Gorman said in a statement. “The addition of their premier offering will provide enhanced capabilities to all our clients and financial advisors.”

Morgan Stanley shares climbed as much as 1.3 percent to $47.89 on the news.

The finance giants sealed the deal two days after the Federal Reserve granted regulatory approval for the acquisition, which will expand Morgan Stanley’s wealth management franchise to oversee $3.3 trillion in assets.

E*Trade will continue to offer commission-free trades under its own brand, and CEO Michael Pizzi will continue to lead the platform as a Morgan Stanley employee.

E*Trade board member Shelley B. Leibowitz has also joined Morgan Stanley’s board. She previously worked as the bank’s chief information officer and brings an extensive cybersecurity and technology background to the table.

The deal closed after a flurry of growth for E*Trade as locked-down investment novices took to trading stocks amid the pandemic. E*Trade added 327,000 retail accounts in the April-to-June quarter and saw its daily average revenue trades surge to a record of more than 1 million.