Davis Polk, Skadden Snag Roles in Morgan Stanley's $13 Billion E*Trade Buy
Davis Polk is advising longtime client Morgan Stanley on the biggest U.S. bank buyout since the 2008 debt debacle, with Skadden taking the lead for E*Trade.
February 20, 2020 at 10:39 AM
2 minute read
(Courtesy photo)
Davis Polk & Wardwell, extending its decadeslong relationship with Morgan Stanley, is advising the bank on the biggest U.S. bank buyout since the 2008 debt debacle: a $13 billion acquisition of discount broker E*Trade.
The all-stock transaction, announced Thursday after The Wall Street Journal first reported the deal, will see Morgan Stanley take on an additional 5 million customers and $360 billion in assets.
A Davis Polk team led by managing partner Neill Barr represented Morgan Stanley in the deal. The team also included corporate partners Marc Williams and Brian Wolfe, executive compensation partner Kyoko Takahashi Lin, antitrust partner Arthur Burke, tax partner Michael Mollerus, with partner Luigi De Ghenghi providing financial institution advice.
Late last year Davis Polk advised Charles Schwab in its $26 billion acquisition of E*Trade competitor TD Ameritrade. The firm also handled Schwab's $1.8 billion buy of USAA's Investment Management Company in July 2019.
Skadden, Arps, Slate, Meagher & Flom represented E*Trade in the transaction. The Skadden team was led by M&A partners Stephen Arcano, David Hepp and Sven Mickisch. Executive compensation partner Joseph Penko, tax partner Edward Gonzalez, regulatory partner Brian Christiansen, investment partner Heather Cruz and antitrust partner Kenneth Schwartz rounded out the Skadden squad. All but Christiansen (Washington, D.C.) are based in New York.
Morgan Stanley launched an online-only tool in 2019 to cater to less wealthy investors with a lower complexity level to their financial portfolios. E*Trade is slated to be a part of that investment arm, according to the Journal.
The deal is a turning point for E*Trade, which had been feeling particular pressure since Schwab purchased TD Ameritrade. Schwab had lowered its trading rates to zero in the fall, sending E*Trade stock into a 16% one-day downward spiral in early October.
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