After a decade of fighting the merger, Goldman Sachs is buying a $5.3 billion stake in Piper Jaffe.
The firm said in a filing Tuesday that the deal will allow it to focus on the future of the financial services industry and make it easier for the industry to continue to grow.
Goldman said it will also work with Jaffreys partner, Morgan Stanley, to develop a strategic plan.
Wall Street analysts said the deal gives Goldman an opportunity to build a business that could make it a leader in financial services while still supporting the company’s long-term financial needs.
Goldman shares rose 3.8% in afternoon trading on Tuesday, after the news broke.
Jaffe has been one of the few publicly traded companies in the industry that focuses on high-growth businesses that are relatively profitable, like high-tech products.
Jaffrey, which has $5 trillion in assets under management, was founded in 2006 by two former Goldman Sachs employees.
The merger will create a $2.4 billion company with about 40,000 employees, the firm said.
“We’re delighted to partner with Piper JAFREys new leadership and look forward to building on our long-standing success with our clients,” Goldman’s CEO Jamie Dimon said in the filing.
Jaffe has also been working with Morgan Stanley to develop its long-range strategy, according to a Morgan Stanley filing last year.
Morgan Stanley is investing $2 billion in Jaffreys future, and it is exploring other opportunities, including selling off certain assets, the filing said.
Jaffe’s board of directors is also evaluating other options for the company, the company said.
The deal will give Goldman the opportunity to focus its long term financial needs on expanding its business and on creating a better value proposition for clients, including by providing access to better products and services, the bank said.