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Morgan Stanley & Co., a blue-chip investment bank,
The deal will likely lead to a new round of Wall Street combinations.
The new firm will dominate Wall Street in some areas. It will become the largest mergers-and-acquisition investment banker, and the leading issuer of initial public offerings and other US equities. It will trail Merrill Lynch in research, but will be No. 5 in both mutual-fund networks and asset management.
Analysts say the link-up makes sense - it combines Morgan Stanley's institutional business with Dean Witter's retail business and asset management. The value of this type of deal became clear in mid-J anuary, when Solomon Brothers announced a "strategic alliance" with Fidelity Investments, the largest mutual-fund company. Solomon Brothers agreed to sell Fidelity at least 10 percent of any stock offering it is involved with. "It's a strategic answer to Merrill," says one brokerage industry analyst who asked not to be named.
The companies have different corporate cultures. Morgan Stanley is an aggressive investment banker with a talent for making money on its investments. Many of its managers have advanced degrees from such institutions as the Harvard Business School. Dean Witter is more like Middle America. It tried to sell securities from Sears, Roebuck stores. It offers a large stable of mutual funds. Morgan Stanley, which is also in the mutual-fund business, has also concentrated on the investment-management business.
The combined firm will have enormous financial resources. It will have a market capitalization of $21 billion, pre-tax income of $3.1 billion, and $12 billion in combined revenues. It will have 3.2 million customers and 409 offices in 38 countries.
Issues:
» Examine the synergies of merger between Morgan Stanley and Dean Witter
» Understand the reasons for the success of Morgan Stanley Dean Witter merger during its initial years
» Study the role of top management in the success of a merger
» Examine the
The deal will likely lead to a new round of Wall Street combinations.
The new firm will dominate Wall Street in some areas. It will become the largest mergers-and-acquisition investment banker, and the leading issuer of initial public offerings and other US equities. It will trail Merrill Lynch in research, but will be No. 5 in both mutual-fund networks and asset management.
Analysts say the link-up makes sense - it combines Morgan Stanley's institutional business with Dean Witter's retail business and asset management. The value of this type of deal became clear in mid-J anuary, when Solomon Brothers announced a "strategic alliance" with Fidelity Investments, the largest mutual-fund company. Solomon Brothers agreed to sell Fidelity at least 10 percent of any stock offering it is involved with. "It's a strategic answer to Merrill," says one brokerage industry analyst who asked not to be named.
The companies have different corporate cultures. Morgan Stanley is an aggressive investment banker with a talent for making money on its investments. Many of its managers have advanced degrees from such institutions as the Harvard Business School. Dean Witter is more like Middle America. It tried to sell securities from Sears, Roebuck stores. It offers a large stable of mutual funds. Morgan Stanley, which is also in the mutual-fund business, has also concentrated on the investment-management business.
The combined firm will have enormous financial resources. It will have a market capitalization of $21 billion, pre-tax income of $3.1 billion, and $12 billion in combined revenues. It will have 3.2 million customers and 409 offices in 38 countries.
Issues:
» Examine the synergies of merger between Morgan Stanley and Dean Witter
» Understand the reasons for the success of Morgan Stanley Dean Witter merger during its initial years
» Study the role of top management in the success of a merger
» Examine the