SWISS WEALTH management firm Julius Baer Group is in talks with Bank of America about acquiring its Merrill Lynch wealth management business outside the US.
“Given the early stage of these discussions, the outcome is entirely open,” Zurich-based Baer said yesterday in a statement.
Jan Vonder Muehll, a spokesman for the bank, declined to elaborate.
The Bank of America wealth unit may fetch about $2 billion (€1.58 billion), said a person familiar with the matter who asked not to be identified because the talks are private.
Sara-Louise Boyes, a London-based spokeswoman for Merrill Lynch, declined to comment on whether any part of the business is for sale.
Baer, a private bank with 178 billion Swiss francs (€148 billion) of assets under management, is seeking acquisitions and building branch networks in emerging markets and Europe as a crackdown on tax evasion pushes customers to repatriate funds from cross-border accounts.
Baer, which bought ING Group’s Geneva-based wealth business in 2009, is also seeking purchases to compete with larger rivals UBS and Credit Suisse Group.
The bank has about one billion francs in excess capital and may have to raise new equity to buy the unit, Christian Stark, a Zurich-based analyst at Crédit Agricole Cheuvreux, wrote in a note to clients yesterday.
The transaction may require a maximum capital increase in the range of one new share for two existing shares, he said.
“We expect mergers and acquisitions in the industry to accelerate and Julius Baer should be a prudent participant in this,” Mr Stark said yesterday.
Baer said last month that revenue earned on assets under management fell in the first four months of this year as clients’ appetite for risk remained “subdued”.
Bank of America sought first-round offers for the wealth management units outside the US in April, a person with direct knowledge of the process said at the time.
The bank’s non-US wealth management units operate in Europe, Asia, the Middle East and Latin America. – (Bloomberg)
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