Morgan Stanley sells asset management unit to Invesco for $1.5 billion

Morgan Stanley, one of the largest US banks by assets said yesterday that it entered into an agreement with investment management firm, Invesco for the sale of its retail asset management business for $1.5 billion in a stock and cash deal, as part of its restructuring.

Under the terms, Invesco will acquire Morgan Stanley's retail management business including Van Kampen Investments, a wholly owned subsidiary, for $500 million in cash and 44.1 million shares.

Morgan Stanley will hold a minority stake of 9.4 per cent in Invesco.

The transaction, which has been approved by the boards of directors of both companies, is expected to close in mid-2010, subject to customary closing conditions and regulatory approvals.

Atlanta-based Invesco is one of the largest independent global investment managers providing investment solutions for retail, institutional and private wealth management clients around the world.

Through this transaction, Invesco will acquire $119 billion of assets across equity, fixed income and alternatives, bringing its assets under management to approximately $536 billion.

The transaction is expected to close in the middle of next year, subject to customary and regulatory approvals.