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Fed OKs Mitsubishi Buy Of Morgan Stanley Stake
Firms plan to pursue a global strategic alliance with a particular focus on corporate and investment banking.
October 7, 2008
The Federal Reserve said late Monday that it approved Mitsubishi UFJ Financial Group's purchase of as much as 24.9% of Morgan Stanley.
The Fed also green lighted the Tokyo banking giant's acquisition of an indirect interest in Morgan Stanley's subsidiary bank, Morgan Stanley Bank NA in Salt Lake City as well as a subsidiary savings association in Jersey City, NJ, and a trust company in Wilmington, Delaware.
On Sept. 29, Mitsubishi UFJ and Morgan Stanley announced an agreement that has the Japanese bank investing $9 billion in equity in Morgan Stanley for a 21% interest. The deal also has Mitsubishi UFJ acquiring 9.9% of Morgan Stanley common stock at a price of $25.26 for $3 billion. Additionally, Mitsubishi UFJ will buy $6 billion of perpetual non-cumulative convertible preferred stock with a 10% dividend and a conversion price of $31.25 a share.
In announcing the transaction last month, both firms said they plan to pursue a global strategic alliance with a particular focus on corporate and investment banking.
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