Morgan Sells Unit to Invesco for $1.5B

NEW YORK (TheStreet) -- Morgan Stanley (MS Quote) agreed to sell its retail asset management business, including Van Kampen Investments, to Invesco(IVZ Quote) for stock and cash valued at $1.5 billion.

Morgan Stanley, in a press release late Monday, said the transaction will allow it to focus on its institutional client base, including corporations, pension plans, foundations and endowments, sovereign wealth funds, and central banks, among others.

Morgan Stanley will get a 9.4% minority interest in Invesco, making it Invesco's largest shareholder.

The sale price includes $500 million in cash and 44.1 million Invesco shares.

The boards of both companies have approved the deal, which is expected to close by mid-2010.

"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.

"The combination of Invesco's strong and diversified product portfolio with Van Kampen's own product strengths and leading distribution capabilities will create a formidable new contender in the retail space -- with the size and scale necessary to compete in today's rapidly changing and consolidating marketplace," he added. "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."

Through the acquisition, Invesco will increase its assets under management by $119 billion to just under $540 billion. At closing, Invesco will have about 700 investment professionals in major markets across the globe.

-- Reported by Joseph Woelfel in New York .

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