Published August 13, 2012
Swiss private bank Julius Baer is buying Bank of America’s (BAC) international Merrill Lynch wealth management business for 860 million Swiss francs ($882 million).
The transaction is expected to boost Baer's client assets by $84 billion, or 40%, representing a major step forward for the bank as it looks for ways to expand its global footprint.
The deal, expected to close later this year or early 2013 pending regulatory approvals, will help Bank of America focus on managing its non-U.S. global banking and markets businesses.
According to the terms of the transaction, both BofA and Julius Baer have agreed to cross-refer clients between the two organizations. U.S.-based Merrill Lynch will also provide the Zurich, Switzerland-based bank with certain products and services, including global equity research and advisory products.
Julius Baer will acquire 2,000 Merrill Lynch staff, including 500 financial advisers, as part of the deal as it looks to expand its global footprint, including into regions such as Bahrain, India, Lebanon and Panama. Post integration, the bank will be present in more than 25 countries and 50 locations globally.
“This transaction represents a rare opportunity to acquire an international pure-play wealth management business of significant size and will add substantial scale to our business in Europe and in key growth markets in Asia, Latin America and the Middle East,” Julius Baer Chairman Daniel Sauter said in a statement.
The bank’s chief executive, Boris Collardi, said the acquisition brings the bank a “major step forward” in its growth strategy and will “considerably strengthen” its leading position in global private banking.
BofA said the deal will have an “immaterial impact” on its financial results.
The sale does not include Bank of America’s Japanese joint venture, Mitsubishi UFJ Merrill Lynch PF Securitiesor, which is an international wealth manager with offices based in the U.S.