DOW JONES NEWSWIRES
Morgan Stanley (MS) confirmed it will sell its retail
asset-management business, including the Van Kampen fund unit, to
investment manager Invesco (IVZ) for stock and cash valued at $1.5
billion.
The investment bank said the sale, which had been rumored for
months, will allow it to focus on its institutional clients.
Invesco will pay $500 million in cash and 44.1 million shares to
Morgan Stanley, which will receive a 9.4% interest in Invesco. The
deal is expected to close in the middle of next year.
"By taking a minority interest in Invesco, Morgan Stanley will
be able to realize significant value in partnership with a
world-class player," said Co-President James Gorman.
He also noted that the sale will remove some limits on product
sales faced by Van Kampen portfolio managers since the Morgan
Stanley Smith Barney joint venture closed.
Invesco said the purchase will expand the number of its
investment advisers to about 700, increase its services to clients
and strengthen its distribution capabilities.
"This combination of talented teams from both organizations 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," said Chief Executive
Martin L. Flanagan.
Morgan Stanley's shares rose 0.7% to $33.34 in after-hours
trading, while Invesco's shares were inactive after closing Monday
at $23.12.
Several other banks have sold their fund units, including Bank
of America Corp. (BAC), which recently sold most of Columbia
Management to Ameriprise Financial Inc. (AMP) for about $1 billion.
In a blockbuster deal announced in June, BlackRock Inc. (BLK) said
it was buying Barclays Global Investors, a unit of British bank
Barclays (BCS), for $13.5 billion.
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;
kathy.shwiff@dowjones.com