| Business | October 17, 2008 2:49 PM EST |
| Mitsubishi saves Morgan Stanley |
| By Luisana Suegart from Markets.com |
Mitsubishi UFJ Financial Group Inc. will acquire part of Morgan Stanley for $9 billion in what will be a life-saving deal for the ailing American bank, both companies said Monday.
Japan’s biggest lender will acquire 21 percent of Morgan Stanley under an agreement reached after both firms renegotiated terms following Morgan Stanley stock’s 60-percent loss last week, which fell to a 13-year low at $9.68.
''Despite a very challenging environment, MUFG and Morgan Stanley have demonstrated our mutual commitment to this strategic alliance and have revised the terms of our investment in the best interests of both companies and our shareholders,'' said Mitsubishi UFJ’s president and CEO
Morgan Stanley shares rose more than 40 percent to $12.49 on Monday morning trading after the announcement was made.
The talks took place over the weekend, with representatives from the U.S. Treasury reportedly intervening in the talks to reassure Mitsubishi that Morgan Stanley investments were safe.
"Today's investment further bolsters our strong capital position and, together with our strategic alliance, will accelerate our transition under our new bank holding company structure and help us realize opportunities created by the continuing dislocation in the financial markets," said John Mack, chairman and CEO of Morgan Stanley.
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