ZURICH--Julius Baer Holding AG (BAER.VX) Monday said it will
acquire Merrill Lynch's wealth management business based outside
the U.S. from Bank of America as well as raise fresh equity to
bolster its finances as the Swiss private-banking specialist seeks
to widen its global footprint.
The Zurich-based bank said it will pay 860 million Swiss francs
($880 million), or 1.2% of the CHF72 billion in assets under
management transferred as part of the cash and share deal, boosting
total assets under management by 40%.
Julius Baer said it will sell stock worth CHF750 million, with
one third issued to BoA and the rest in a rights issues. The rest
of the purchase price will be financed with existing funds and the
issue of CHF200 million in hybrid securities.
The extra equity raised will give Julius Baer "future strategic
flexibility," the bank said.
"At that level of [assets under management] transferred, the
capital required to support the incremental risk-weighted assets is
expected to amount to about CHF300 million, and the total
restructuring, integration and retention costs will amount to about
CHF400 million," Julius Baer said.
"This acquisition brings us a major step forward in our growth
strategy and will considerably strengthen our leading position in
global private banking by adding a new dimension not only to growth
markets but also to Europe," said Julius Baer Chief Executive Boris
Collardi.
Julius Baer stocks closed at 35.43 Swiss francs on Friday, for a
year-to-date decline of 3.6%.
Write to Neil MacLucas at neil.maclucas@dowjones.com
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