Morgan Stanley agreed on Thursday to buy asset management firm Eaton Vance Corp. for about $7 billion in a cash-and-stock deal that advances Chief Executive James Gorman's push to bolster the bank's wealth and investment management businesses.

Eaton's shareholders will receive $28.25 per share in cash and 0.5833 Morgan Stanley shares (MS) for each share held. The deal represents a premium of 38% to Eaton's (EV) last closing price on Wednesday.

Gorman has been trying to build out the bank's wealth management unit to insulate it better from weak periods for its trading and investment banking operations.

The acquisition means Morgan Stanley Investment Management will have approximately $1.2 trillion of assets under management and over $5 billion in combined revenues, Morgan Stanley said.

"Eaton Vance is a perfect fit,” Gorman said in the statement announcing the deal.

Since taking over a decade ago, Gorman has pulled off a number of big acquisitions. He orchestrated the bank’s takeover of Smith Barney, making wealth management the cornerstone of his plan to stabilize revenue.

Eaton will also pay its shareholders a one-time special cash dividend of $4.25 per share before the close of the deal.

Eaton's shares jumped 36.3% to $55.79 in response to the news, while Morgan Stanley was down 2.6% in premarket trading.