Thinning the herd: Merrill close to selling non-U.S. units

Thinning the herd: Merrill close to selling non-U.S. units
In final negotiations with Julius Baer, sources say; purchase price pegged at upwards of $2B
AUG 13, 2012
Julius Baer Group Ltd., the Swiss money manager established in 1890, is nearing an agreement to acquire Bank of America Corp.'s Merrill Lynch wealth management businesses outside the U.S., according to two people with knowledge of the matter. An announcement may come as early as Aug. 13, said the people, who asked not to be identified because the matter is private. Julius Baer said June 19 it was in talks to buy the Merrill Lynch units, which may be valued at $1.5 billion to $2 billion, the people said. The two parties are negotiating the final details and the deal could still fall apart, they said. Jan Vonder Muehll, a spokesman for Zurich-based Julius Baer and Sara-Louise Boyes, a London-based spokeswoman for Merrill Lynch wealth management, declined to comment. Baer, which bought ING Groep NV's Geneva-based wealth business in 2009, is seeking acquisitions to boost its 178.8 billion francs ($183 billion) of managed assets as a global crackdown on tax evasion pushes customers to repatriate funds from offshore accounts in Switzerland. The Merrill Lynch purchase may make the bank the third-biggest Swiss wealth manager after UBS AG and Credit Suisse Group AG. Julius Baer fell as much as 1.3 percent in Zurich trading and was down 1 percent to 35.22 Swiss francs as of 2:13 p.m. The stock has declined 1.4 percent this year, cutting the bank's market value to 6.9 billion francs. Ideal Time The Merrill Lynch units outside the U.S. manage about $80 billion of assets, one of the people said. The business has clients in Europe, the Middle East and Africa, plus high-net- worth customers in Latin America and Asia, outside Japan. “We're absolutely at the bottom in market valuation terms, so in that respect it's an ideal time to buy a private-banking business,” said Ray Soudah, head of MilleniumAssociates AG, an advisory firm for banking mergers based in Zurich and London. Julius Baer bought a 30 percent stake in Brazilian wealth manager GPS Investimentos Financeiros e Participacoes SA and acquired Macquarie Group Ltd.'s Asian private-client business last year. Baer lost out to Safra Group last November to buy a controlling stake in Basel, Switzerland-based Bank Sarasin & Cie. AG. --Bloomberg News--

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