February 21, 2020 / 11:10 PM / 2 months ago

Morgan Stanley to get $375 million termination fee if E*Trade walks away from deal

People take photos by the Morgan Stanley building in Times Square in New York City, New York U.S., February 20, 2020. REUTERS/Brendan McDermid

(Reuters) - Morgan Stanley will receive a $375 million breakup fee if E*Trade Financial Corp walks away from its $13 billion deal for the discount brokerage, the U.S. bank said on Friday.

On Thursday, Morgan Stanley entered into a deal to buy E*Trade, the biggest acquisition by a major Wall Street bank since the 2007-2009 financial crisis.

E*Trade has been the subject of M&A speculation for some time, especially after Charles Schwab Corp said it would buy TD Ameritrade Holding Corp last year.

If Morgan Stanley terminates the deal due to antitrust issues, E*Trade would receive $525 million, Morgan Stanley said in a regulatory filing www.sec.gov/ix?doc=/Archives/edgar/data/895421/000095010320003111/dp121716_8k.htm.

The bank expects to complete the deal by the fourth quarter, and executives expressed confidence that it would meet regulatory approvals.

Reporting by Abhishek Manikandan in Bengaluru; Editing by Shailesh Kuber

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