Morgan Stanley Announces $13 Billion Deal to Acquire E*Trade
The brokerage industry has changed a lot in the past 50 years, with deregulation in the 1970s setting the stage for the rise of discount brokerages to challenge Wall Street's giants and appeal to ordinary investors. Lately, though, brokerage companies have been combining forces, especially as well-known full-service financial institutions realize the value of having a large customer base of retail investors.
Morgan Stanley (NYSE: MS) just announced that it would pay $13 billion in an all-stock deal to acquire E*Trade Financial (NASDAQ: ETFC). In doing so, Morgan Stanley hopes to give its Wall Street-oriented business a broader scope. For E*Trade, the deal finally answers a tough question that the discount broker had faced for months without resolution.
Discount brokers have fought each other for a long time, and ever since Charles Schwab (NYSE: SCHW) began operating as the first-mover in discount brokerages back in 1975, players in the discount brokerage industry have sought to distinguish themselves from their full-service counterparts by charging much lower fees. Yet the specific areas in which they've competed against each other have changed a few times along the way:
Source Fool.com
