UBS has reached an agreement to sell its private banks & GAM unit to Julius Baer for CHF 5.6 billion, consisting of CHF 3.8 billion in cash and cash equivalents as well as a 21.5% stake in the enlarged Julius Baer, worth CHF 1.8 billion.
The unit comprises the three private banks, Banco di Lugano, Ehinger & Armand von Ernst and Ferrier Lullin as well as specialist asset manager GAM1. Hans de Gier and David Solo will join the management team of the new bank.
“Julius Baer’s business model is very similar to the one of the three private banks and GAM. The sale of the complete unit pays special attention to the preservation of continuity between clients and their advisors – creating value for all parties,” said Peter Wuffli, UBS CEO.
“These private banks and GAM are an excellent fit to Julius Baer. We have the same understanding of private banking and asset management as we both strive to understand the wealth management needs of each individual client and offer them value-enhancing solutions,” Raymond J. Baer, chairman of Julius Baer, said.
There is also a 21.5% non-strategic participation by UBS in the new Julius Baer after the completion of the transaction, but UBS will not take a seat on Julius Baer’s board of directors or exercise any control or influence on its strategy or on its operational business decisions, and UBS will not vote its shares.
The private banks will adopt the Julius Baer brand name, but GAM will continue to be marketed as an independent brand.
Hans de Gier, currently chairman of SBC Wealth Management AG, will be appointed CEO of the new Julius Baer. David Solo, currently CEO of GAM, will be appointed head of Julius Baer’s asset management business. At the Annual General Meeting in 2006, Georges Gagnebin, currently vice chairman of SBC Wealth Management AG, will be proposed for election to the Board of Directors of Julius Baer.