Morgan Stanley has received all regulatory approvals required to acquire the remaining 35 per cent interest of Morgan Stanley Smith Barney, from Citigroup.

Upon the close of the purchase, Morgan Stanley will own 100 per cent of the business, which operates under the name Morgan Stanley Wealth Management.

Morgan Stanley will notify Citigroup that it intends to exercise its right to purchase the remaining interest at a previously established price of $4.7 billion, payable in cash.  The closing is expected to take place around 28 June 2013, the firm said.

Morgan Stanley said that it will record a negative adjustment to capital (shareholders’ equity) of approximately $200 million (net of tax) to reflect the difference between the purchase price for the 35 per cent redeemable non-controlling interest in MSSBH ($4.725 billion) and its carrying value. This adjustment, Morgan Stanley said, will negatively impact the calculation of basic and fully-diluted earnings per share for the three and six month periods, ended June 30 2013.

In addition, MSSBH will redeem all of the “class A” preferred interests in MSSBH owned by Citigroup and its affiliates for a purchase price equal to their liquidation preference plus accrued and unpaid distributions, or approximately $2 billion in aggregate, simultaneously with Morgan Stanley’s purchase of the remaining interest.

“This is a historic day for Morgan Stanley. It is the culmination of a multi-year effort to transform our business model into one that offers stronger shareholder returns and greater stability in volatile markets. Immediately upon closing, we expect to start seeing the benefits of 100 per cent-ownership, including an expanded deposit base, unique syndication and distribution capabilities and enhanced opportunities, for both our wealth management and institutional clients,” said James Gorman, chairman and chief executive of Morgan Stanley.