Morgan Stanley (MS) completed its purchase of a brokerage joint venture with Citigroup Inc.’s Smith Barney, capping a four-year effort to more than double the size of its wealth-management division.
Morgan Stanley purchased the 35 percent of the business it didn’t own from Citigroup, the New York-based company said yesterday in a regulatory filing. The firm said last week that it would pay $4.7 billion and take a $200 million charge in the second quarter related to the purchase.
Chief Executive Officer James Gorman, 54, struck a deal in 2009 to gain a controlling stake in the venture that merged Morgan Stanley’s Dean Witter franchise with Citigroup’s Smith Barney unit. The business, renamed Morgan Stanley Wealth Management last year, is the world’s largest brokerage, with $1.79 trillion in client assets and 16,284 advisers on March 31.
“This has been an incredibly challenging five-year period not just for Morgan Stanley, but for our industry and the country, frankly, and it’s exciting to be stepping forward with something as dramatic as this acquisition,” Gorman said in a video posted on the firm’s website. “Right now, what we need to do is focus on making it work.”