Baer eyes bull: Swiss firm bids for Merrill’s non-U.S. wealth management biz
Herd on the Street: Bids solicited in April, source claims
The venerable Swiss asset manager is in early talks to buy Merrill Lynch's non-U.S. wealth management unit. The offer? Reportedly, around $1.5B
Julius Baer Group Ltd., the Swiss wealth manager established in 1890, said it’s in talks with Bank of America Corp. about Merrill Lynch’s wealth management business outside the U.S.
“Given the early stage of these discussions, the outcome is entirely open,” Zurich-based Baer said today in a statement. The Swiss private bank with 178 billion Swiss francs ($187 billion) of assets under management didn’t give further details on the talks.
The Bank of America wealth unit may be sold to Baer for $1.5 billion to $2 billion, CNBC reported yesterday. Jan Vonder Muehll, a Zurich-based spokesman for Julius Baer, declined to comment further on today’s statement.
Switzerland’s fourth-biggest money manager 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 acquired ING Groep NV’s Geneva-based wealth business in 2009, is also seeking purchases to compete with larger rivals such as UBS AG and Credit Suisse Group AG.
‘Consolidation Wave’
Baer said last month that revenue earned on assets under management fell in the first four months of this year as client appetite for risk remained “subdued.” The private bank’s gross margin, a measure of profitability, was “slightly below” 100 basis points over the period compared with 105 basis points in 2011. A basis point is one-hundredth of a percentage point.
Bank of America, based in Charlotte, North Carolina, sought first-round offers for the wealth-management units outside the U.S. in April, a person familiar with the matter said at the time. The bank’s non-U.S. wealth-management units operate in Europe, Asia, the Middle East and Latin America.
Julius Baer’s bid last year to buy a controlling stake in Basel, Switzerland-based Bank Sarasin & Cie. AG was trumped by an offer from Safra Group. Chief Executive Officer Boris Collardi said April 11 at the firm’s annual shareholder meeting he is still interested in making acquisitions as the Swiss wealth-management industry faces a “consolidation wave.”
–Bloomberg News–
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