Financial services entity Morgan Stanley, one of the worst hit by the economic turmoil, will sell its retail asset management business to Invesco in a cash and stock deal worth USD 1.5 billion.
Both companies have entered into an agreement for the deal, which is expected to close in mid 2010.
Invesco in a statement on Monday said it would acquire Morgan Stanley’s retail asset management business, including Van Kampen Investments for USD 1.5 billion.
The transaction would comprise USD 500 million in cash and 44.1 million shares representing USD 1 billion in Invesco equity. It would also give Morgan Stanley a 9.4 per cent equity interest in Invesco.
Once the deal is complete, Invesco would have about 700 investment professionals.
In India, Morgan Stanley has a good presence in various business segments, including investment banking, sales & trading, fixed income and private wealth management services.
“By taking a minority interest in Invesco, Morgan Stanley will be able to realize significant value in partnership with a world class player.
“In addition, this transaction will mitigate certain affiliated product sales restrictions faced by Van Kampen portfolio managers since the closing of the Morgan Stanley Smith Barney joint venture,” Morgan Stanley’s Co-President James Gorman said in a separate statement.
The entity had received from the US Federal government to tide over the financial turmoil.
“This combination of talented teams from both organisations will enhance Invesco’s ability to deliver meaningful solutions to our retail and institutional clients around the world, and better position Invesco for long term success,” Invesco President and CEO Martin L Flanagan said.
Invesco said it would be purchasing a business having USD 119 billion in assets under management across equity, fixed income, alternatives (including mutual funds and separate accounts) and unit investment trusts.