Invesco Buys Into Morgan Stanley

Invesco Ltd. said Monday it would acquire the retail asset management business of Wall Street giant Morgan Stanley, including Van Kampen Investments, for cash and stock valued at $1.5 billion.

Atlanta-based Invesco said the acquisition brings with it $119 billion in equity, fixed income, and mutual fund assets under management. The deal will fold 650 investment and operations professionals under the Invesco banner.

With the deal, Morgan Stanley receives $500 million in cash and a 9.4 percent equity interest in Invesco equating to roughly 44.1 million shares, Invesco said.

The acquisition is expected to close by mid-2010, pending approval of both firm’s boards, shareholders, and regulators.

“We are excited to expand the depth and breadth of our investment strategies, which will enable us to offer our clients a truly comprehensive range of investment capabilities through an expanded set of investment vehicles,” Martin L. Flanagan, Invesco president and CEO, said in a news release. “This combination of talented teams from both organizations will enhance Invesco’s ability to deliver meaningful solutions to our retail and institutional clients around the world and better position Invesco for long-term success.”

Van Kampen is one of the largest investment firms in the nation, specializing in mutual funds and retirement services.

Invesco said in a news release the deal would expand it investment strategies and allow the firm to “offer an even more comprehensive range of investment capabilities and vehicles to our clients around the world.”

The acquisition will also boost the company’s position in Japan.

“This complementary combination fully meets Invesco’s previously stated acquisition criteria, and we believe [it] strongly benefits our clients and shareholders,” Loren Starr, chief financial officer of Invesco, said in a statement.