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Chase looks at Morgan units
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April 2, 1998: 8:47 a.m. ET
Chase Manhattan may buy custody and clearing businesses for $600 million
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NEW YORK (CNNfn) - Chase Manhattan Corp. may be looking to buy the custody and clearing businesses of Morgan Stanley Dean Witter & Co. for more than $600 million.
Morgan's custody operation holds about $400 billion worth of stock certificates and other assets for institutional and individual clients and its clearing services are responsible for processing securities trades.
The talks are still tenuous, the Wall Street Journal said Thursday, but Chase is apparently in the lead to pick up the Morgan operations.
While neither company would comment on any negotiations, sources familiar with the matter told the Journal that a deal could be announced within the next two weeks.
Morgan Stanley (MWD) apparently wants to focus on its more lucrative securities and mutual fund operations and also on the Discover credit services it inherited when it merged with Dean Witter last year.
Morgan Stanley's custody and clearing businesses were once a large source of steady income for the investment bank. However, when it merged with Dean Witter, it doubled its assets under management and custody and clearing shrank in importance.
By comparison, Chase (CMB), which is already the world's largest custody services provider, has $4 trillion in custodial assets.
Chase's attraction to the deal is that it can add what is a steady, if small, increase to its fee revenues with only a slight rise in overhead. 
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