Morgan Stanley Investment Management Inc. entered into a definitive agreement to acquire Eaton Vance Corp. (NYSE:EV) from 25 senior people at Eaton Vance Corp. and others for $6.5 billion on October 7, 2020. Under the terms of the merger agreement, Eaton Vance shareholders will receive $28.25 per share in cash and 0.5833x of common stock of Morgan Stanley (NYSE:MS), parent of Morgan Stanley Investment Management Inc., representing a total consideration of approximately $56.50 per share. Based on the $56.50 per share, the aggregate consideration paid to holders of Eaton Vance’s common stock will consist of approximately 50% cash and 50% Morgan Stanley common stock. The merger agreement also contains an election procedure allowing each Eaton Vance shareholder to seek all cash or all stock, subject to a proration and adjustment mechanism. In addition, Eaton Vance common shareholders will receive a one-time special cash dividend of $4.25 per share to be paid pre-closing by Eaton Vance to Eaton Vance common shareholders from existing balance sheet resources. The special dividend of $4.25 per share on Eaton's common stock is payable on December 18, 2020, to shareholders of record on December 4, 2020. As of February 19, 2021, in connection with the transaction, the deadline for Eaton Vance shareholders to elect the form of merger consideration they desire to receive in the transaction has been set for February 24, 2021. Upon closing, Eaton Vance, Calvert Research and Management, Eaton Vance Advisers International Ltd., and Atlanta Capital will become the indirect wholly owned subsidiaries of Morgan Stanley. If the agreement is terminated by Eaton then, Eaton will be liable to pay a termination fees of $206 million to Morgan Stanley. The Eaton Vance Wealth Management team and brand will be maintained. Thomas E. Faust, Chairman, Chief Executive Officer & President of Eaton Vance and his team will join Morgan Stanley Investment Management. Following the closing, Calvert Research and Management is expected to retain its existing portfolio management and other key personnel who provide services to the funds and Eaton Vance Advisers International Ltd. and Atlanta Capital are each expected to maintain their respective portfolio management and other key personnel who currently provide services to the funds. The transaction is not expected to affect Hermes or AIP. The acquisition is subject to customary closing conditions including regulatory approvals, Eaton Vance's shareholder approval, the termination or expiration of any applicable waiting period or periods under the Hart-Scott-Rodino Antitrust Improvements Act, the effectiveness of the registration statement on Form S-4 to register the shares of Morgan Stanley Common Stock to be issued pursuant to the transaction, authorization for listing on the New York Stock Exchange of the shares issued and approvals of mutual fund boards. The transaction has been approved unanimously by the voting trust consisting of 25 senior people that includes general management and the leadership of Eaton Vance investment team that holds all of the voting common stock of Eaton Vance. Eaton and Morgan Stanley boards have unanimously approved the transaction. On November 10, 2020, Federal Trade Commission has provided early termination of the waiting period under the Hart-Scott-Rodino for the transaction. A joint special meeting of shareholders of the Eaton Vance is scheduled to be held on January 7, 2021. As of January 19, 2021, the registration statement was declared effective. As of February 8, 2021, a special meeting of shareholders of PIMCO Funds will be held on March 26, 2021 approval of replacement contracts the terms of which are materially identical to the terms of the corresponding current agreements. The Trustees of the PIMCO Funds unanimously approved and recommended shareholders to vote "for" the proposals. As of January 8, 2021, shareholders of certain Eaton Vance closed-end funds approved new investment advisory agreements and, where applicable, new investment sub-advisory agreements for the Funds at a joint special meeting of shareholders held on January 7, 2021. Shareholders of Eaton Vance Short Duration Diversified Income Fund (NYSE: EVG) voted at the Meeting not to approve the new investment advisory agreement for EVG. The Board of Trustees of EVG will consider what additional actions to take with respect to EVG. As of January 25, 2021, shareholders of certain Eaton Vance closed-end funds approved new investment advisory agreements and, where applicable, new investment sub-advisory agreements for the Funds at a joint special meeting of shareholders held on January 22, 2021. As of February 22, 2021, shareholders of certain Eaton Vance mutual funds approved new investment advisory agreements a joint special meeting of shareholders held on February 18, 2021 in connection with the proposed acquisition. The transaction is expected to close in the second quarter of 2021. As per the filing dated February 1, 2021, the transaction is expected to close no later than early in the second quarter. On February 19, 2021, the transaction is expected to close on March 1, 2021. The transaction is expected to be breakeven to earnings per share immediately and marginally accretive thereafter, with fully phased-in cost synergies, and add approximately 100bps to return on tangible common equity. The transaction will result in ROTCE accretion of ~100bps offsets dilution to tangible book value per share. Robert W. Smith and Penny J. Minna of DLA Piper LLP acted as legal advisors to Eaton. Marc O. Williams, Brian Wolfe, Michael Mollerus, Gregory S. Rowland, Kyoko Takahashi Lin, Luigi L. De Ghenghi, Zachary J. Zweihorn, John B. Meade and Arthur J. Burke of Davis Polk & Wardwell LLP acted as the legal advisor to Morgan Stanley, parent of Morgan Stanley Investment. Joseph B. Conahan, Eric P. Hanson, Lillian Brown, Andrew Langworthy, Franca Harris Gutierrez, Daniel W. Halston, Jeff P. Johnson, Stephanie Nicolas, Amy A. Null, Willian H. Paine, Leonard A. Pierce, Erika L. Robinson, Julie Hogan Rodgers, Knute J. Salhus, Hartmut Schneider, Tiffany J. Smith, Meghan M. Walsh and Jonathan Wolfman of Wilmer Cutler Pickering Hale and Dorr LLP acted as the legal advisor to Eaton. Houlihan Lokey Capital, Inc. and Centerview Partners LLC acted as financial advisors and fairness opinion providers to Eaton. Centerview Partners will receive a fee of approximately $50 million from Eaton, $2.5 million of which was payable upon the rendering of Centerview’s opinion. Houlihan Lokey is entitled to an aggregate fee of $2.5 million for delivery of Houlihan Lokey’s opinion. Lee Meyerson, Ravi Purushotham and Jon Goldstein of Simpson Thacher acted as the legal advisor to Centerview Partners LLC in the transaction. American Stock Transfer & Trust Company, LLC acted as the transfer agent for Eaton Vance on the transaction. Broadridge Financial Solutions, Inc. (NYSE:BR) acted as the transfer agent for Morgan Stanley on the transaction. Morgan Stanley acted as legal advisor Morgan Stanley Investment Management Inc. Julie Mansi and Michael Taylor of Borden Ladner Gervais LLP acted as legal advisor to Eaton Vance Corp. Morgan Stanley Investment Management Inc. completed the acquisition of Eaton Vance Corp. (NYSE:EV) from 25 senior people at Eaton Vance Corp. and others on March 1, 2021. Thomas E. Faust, Jr., Chairman and Chief Executive Officer of Eaton Vance, will become Chairman of Morgan Stanley Investment Management and will join the Morgan Stanley Management Committee.