Morgan Stanley to get US$375 million termination fee if E*Trade walks away from deal

Morgan Stanley to get US$375 million termination fee if E*Trade walks away from deal

Morgan Stanley will receive a US$375 million breakup fee if E*Trade Financial Corp walks away from its US$13 billion deal for the discount brokerage, the U.S. bank said on Friday.

People take photos by the Morgan Stanley building in Times Square in New York
People take photos by the Morgan Stanley building in Times Square in New York City, New York U.S., February 20, 2020. REUTERS/Brendan McDermid

REUTERS: Morgan Stanley will receive a US$375 million breakup fee if E*Trade Financial Corp walks away from its US$13 billion deal for the discount brokerage, the U.S. bank said on Friday.

On Thursday, Morgan Stanley entered into a deal to buy E*Trade, the biggest acquisition by a major Wall Street bank since the 2007-2009 financial crisis.

E*Trade has been the subject of M&A speculation for some time, especially after Charles Schwab Corp said it would buy TD Ameritrade Holding Corp last year.

If Morgan Stanley terminates the deal due to antitrust issues, E*Trade would receive US$525 million, Morgan Stanley said in a regulatory filing https://www.sec.gov/ix?doc=/Archives/edgar/data/895421/000095010320003111/dp121716_8k.htm.

The bank expects to complete the deal by the fourth quarter, and executives expressed confidence that it would meet regulatory approvals.

(Reporting by Abhishek Manikandan in Bengaluru; Editing by Shailesh Kuber)

Source: Reuters

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