=E*TRADE (ETFC) to be acquired by Morgan Stanley (MS) for approx. $13 bln

(Reuters) - Morgan Stanley (MS) said on Thursday it would buy discount brokerage E*Trade Financial (ETFC) in an all-stock deal worth about $13 billion, the biggest deal by a Wall Street bank since the financial crisis.

The deal will help Morgan Stanley boost its wealth management unit, a business that Chief Executive Officer James Gorman has been trying to build out to insulate the bank from weak periods for trading and investment banking.

Morgan Stanley will get E*Trade's more than 5.2 million client accounts and $360 billion of retail client assets as part of the deal. The brokerage's CEO, Mike Pizzi, will continue to run the business following the merger.

"E*Trade represents an extraordinary growth opportunity for our Wealth Management business and a leap forward in our Wealth Management strategy," Gorman said.

E*Trade became popular nearly two decades ago by running commercials that blasted financial advisers for high fees.

Its revenue growth has taken a hit in recent years from the emergence of digital upstarts called roboadvisers, falling commissions and lower interest rates.

E*Trade shareholders will receive 1.0432 Morgan Stanley shares for each share as part of the deal. That translates to $58.74 per share - a premium of 30.7% to the last closing price of E*Trade shares.