Invesco To Acquire Morgan Stanley Unit For $1.5B

ATLANTA (AP) — Morgan Stanley said Tuesday it will sell its retail asset management business, including the Van Kampen division, to money manager Invesco Ltd. for $1.5 billion in a move to focus on institutional clients.

The deal, which includes $500 million in cash and 44.1 million shares, will make Morgan Stanley Invesco's largest shareholder, with a 9.4 percent equity stake. It boosts Invesco's assets under management by $119 billion to about $536 billion.

New York-based Morgan Stanley said the sale allows it to focus on institutional clients such as pension plans, endowments, sovereign wealth funds and central banks, among others.

"By taking a minority interest in Invesco, Morgan Stanley will be able to realize significant value in partnership with a world-class player," said Morgan Stanley Co-President James Gorman, in a statement. "In addition, this transaction will mitigate certain affiliated product sales restrictions faced by Van Kampen portfolio managers since the closing of the Morgan Stanley Smith Barney joint venture."

The transaction, which has been approved by the boards of both companies, is expected to close in mid-2010.