Wall Street giant Morgan Stanley ( MWD) Tuesday said it will acquire Barra Inc. ( BARZ) for $41 a share, or $816.4 million, as it expands its market index operations.

Morgan Stanley is paying a 9% premium for the Berkeley, Calif.-based Barra, based on its closing price of $37.63 Monday.

The company said the combination "will create a leading global provider of benchmark indices and risk management analytics." Barra will become part of Morgan Stanley's Capital International unit, whose stable of global indices are considered market barometers.

Barra, founded in 1975, delivers risk management systems and services.

The deal is expected to close in the next 60 to 120 days.

Barra shares rose $3.07, or 8.2%, to $40.70 in premarket trading. Morgan Stanley shares closed at $56.60 yesterday.

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