WALL STREET MEETS MAIN STREET : MORGAN STANLEY, DEAN WITTER TO MERGE.Byline: Peter Truell The New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Times Morgan Stanley  To comply with Wikipedia's , the introduction of this article needs a complete rewrite. Group, one of Wall Street's elite investment
firms, and Dean Witter, Discover & Co., which sells stocks and bonds
to the masses, agreed to merge Wednesday into the world's biggest
securities company in a transaction valued at $10.2 billion.
The combination of Morgan Stanley, with offices in 19 countries and a client roster of some of the world's best-known blue-chip corporations, and Dean Witter, a mutual fund and credit card giant that serves more than 40 million Americans, would knock Merrill Lynch & Company from the No. 1 spot in both assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. and market value. Morgan Stanley saw Dean Witter as the perfect pipeline from Wall Street to Main Street. Morgan Stanley, which issues securities for some of the world's biggest companies, wanted to increase its access to millions of Americans who had been lured to the stock market in recent years. Dean Witter, with its thousands of salespeople in many cities and towns, was just the ticket. For Dean Witter's customers, the merger could mean many new investment choices from Morgan Stanley's stock-and-bond factory, from new stock offerings that Morgan Stanley manages for big corporations to the most exotic bonds from developing nations. But the new firm faces the stiff challenge of integrating Morgan Stanley's aristocratic culture, where managing directors routinely make millions of dollars a year for advising companies like AT&T, with the meat-and-potatoes environment at Dean Witter, whose brokers ply their trade everywhere from suburban office complexes to small-town storefronts. In a way, the merger would be as if Sears and Saks Fifth Avenue Saks Fifth Avenue is a chain of upscale American department stores that is owned and operated by Saks Fifth Avenue Enterprises (SFAE), a subsidiary of Saks Incorporated. It competes in the elite luxury department store market with Neiman Marcus, Bergdorf Goodman and Barneys New decided to join together. Wednesday's announcement brought immediate speculation about other possible links in the securities and banking industry, which has undergone a shakeout over the last two years as companies have scrambled to come to grips with the globalization globalization Process by which the experience of everyday life, marked by the diffusion of commodities and ideas, is becoming standardized around the world. Factors that have contributed to globalization include increasingly sophisticated communications and transportation of financial markets. ``This is the first of many deals in an industry that's suffering'' from overcrowding overcrowding overcrowding of animal accommodation. Many countries now publish codes of practice which define what the appropriate volumetric allowances should be for each species of animal when they are housed indoors. Breaches of these codes is overcrowding. , said Peter C. Davis, a partner at Booz Allen & Hamilton, a consulting firm. Indeed, the shares of Paine Webber Inc. have risen sharply in recent days as investors have speculated that that company, which has a huge network of Main Street offices, might be taken over or combine with a firm that has a strong Wall Street franchise. A Paine Webber spokesman said Wednesday that his company intended to remain independent. The new company, to be named Morgan Stanley, Dean Witter, Discover & Co., would have a total stock-market value of $23.3 billion at Wednesday's closing price, compared with Merrill Lynch's $14 billion. It would also have a total of $270 billion in assets under management, including mutual funds and individual accounts the most of any securities firm. The Morgan Stanley-Dean Witter combination, with joint 1996 revenues of over $12 billion, will have a huge presence in securities trading, investment management, credit card and mutual-fund businesses. To achieve the combination, which is expected to be completed in mid-1997, Dean Witter will make a tax-free exchange tax-free exchange An exchange of assets between taxpayers in which any gain or loss is not recognized in the period during which the exchange takes place. Rather, taxpayers are required to adjust the basis of assets exchanged. of 1.65 of its shares for each Morgan Stanley share. Morgan Stanley's stock soared by $7.875 a share on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. , to $54.25. Dean Witter's shares gained $2 a piece, to $40.625. ``It makes sense to pick your partner,'' said Morgan Stanley Chairman Richard B. Fisher Richard B. "Dick" Fisher (1936 – December 16, 2004) was chairman emeritus of the securities firm Morgan Stanley. Early life Fisher was born in Philadelphia. In 1944 at age 8, Dick contracted a severe case of polio. at a news conference in midtown Manhattan on Wednesday. Fisher will become chairman of the executive committee of the new firm's board of 14 directors, half from Dean Witter and half from Morgan Stanley. ``We have initiated this and produced this opportunity together because we believe this is the strongest possible combination we could make.'' Philip J. Purcell Philip J. Purcell headed Sears' 1981 acquisition of Dean Witter, helping to create the Discover Card. After Morgan Stanley merged with Dean Witter Reynolds in 1997, Purcell replaced Morgan Stanley's John J. Mack as CEO. , Dean Witter's top executive, will become chairman and chief executive of the combined company. His No. 2 will be John J. Mack John J. Mack (1944 - ) (born Machoul) is the CEO and Chairman of the Board of investment bank Morgan Stanley. He returned to the company on June 30, 2005 to replace Phil Purcell, who had become CEO after the 1997 merger of Morgan Stanley and Dean Witter, of which Purcell was , currently Morgan Stanley's president. LOCAL OFFICES Dean Witter offices in the San Fernando Valley San Fernando Valley Valley, southern California, U.S. Northwest of central Los Angeles, the valley is bounded by the San Gabriel, Santa Susana, and Santa Monica mountains and the Simi Hills. : 3800 W. Alameda Ave., Burbank, (818) 972-3800 801 N. Brand Blvd., Glendale, (818) 502-4000 15490 Ventura Blvd., Sherman Oaks, (818) 907-2400 21650 Oxnard St., Woodland Hills, (818) 999-2550 Morgan Stanley has no offices in the San Fernando Valley. CAPTION(S): Box, Photo, Chart Photo: John J. Mack of Morgan Stanley, left, and Dean Witter's Philip J. Purcell unveil their deal Wednesday. Associated Press Chart: Securities mega-merger Associated Press |
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