The final regulatory approvals needed for Morgan Stanley (NYSE: MS ) to complete its acquisition of Morgan Stanley Smith Barney Holdings (MSSBH) from Citigroup (NYSE: C ) -- it currently holds a 65% ownership position -- have been received, Morgan Stanley said in a statement today.
Citigroup will receive a previously agreed upon cash payment of $4.7 billion from Morgan Stanley for the remaining 35% of Smith Barney it doesn't already own. The deal is expected to be completed by the end of June. Morgan Stanley will take an estimated $200 million net charge on its fiscal Q2 ending June 30.
In addition to its acquisition of MSSBH's outstanding ownership interest, Morgan Stanley intends to redeem all Class A preferred interests owned by Citigroup for an estimated $2.028 billion, the company said.
Commenting on the deal, James Gorman, Chairman and CEO of Morgan Stanley, said, "This is a historic day for Morgan Stanley. It is the culmination of a multi-year effort to transform our business model into one that offers stronger shareholder returns and greater stability in volatile markets. ... With this milestone behind us, we have added momentum to carry out our full plan to achieve higher shareholder returns."