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Why is Morgan Stanley Buying E-Trade?

Investment bank Morgan Stanley MS is acquiring brokerage firm E-Trade ETFC for $13 billion. Shares of ETFC have surged over 23% on the news, while MS is trading down around 4% on Thursday.

This marks the biggest takeover by a U.S. bank since the financial crisis, and follows last year’s all-stock purchase of TD Ameritrade by Charles Schwab SCHW.

E-Trade will help give Morgan Stanley a digital edge and new corporate service customers; the company has 5.2 million clients and over $360 billion of retail client assets, which will add to Morgan Stanley’s 3 million clients and $2.7 trillion of client assets. But in terms of client assets, the combined company will still trail Fidelity, Vanguard, and Schwab.

The deal is expected to close in the fourth quarter.