Did Morgan Stanley Finally Dump Dean Witter?
The Morgan Stanley Smith Barney deal is now official. The new wealth management firm officially launched this week and has more than 20,000 financial advisors with $1.7 trillion in client assets. The firm has been formed through a joint venture between Morgan Stanley and Citigroup. Morgan paid $2.7 billion for a 51% stake in the new company with an option to buy the remaining 49% from Citigroup sometime between years 3 to 5. $2.7 billion for 51% of Smith Barney is truly a fire sale deal. At its 2007 peak, estimates of Smith Barney’s value ranged between $20-30 billion. Let’s not forget that Ken Lewis, CEO of Bank of America, paid $50 billion for Merrill Lynch in September 2008, a time when a failure was imminent at Merrill. The Smith Barney purchase may be a defining moment in Morgan Stanley CEO John Mack’s tenure. Sure, the firm will reap a heavy return on investment when the financial markets stabilize but it also fulfills a decade long ambition of many Morgan Stanley Executives – Th
