Swiss banking group UBS has agreed to divest a 51.2% interest in its B2B fund distribution platform UBS Fondcenter to Clearstream in a CHF389m ($400m) deal.
Post deal completion in the second half of this year, Fondcenter will be merged with the Fund Desk business of Clearstream.
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The merged entity will operate under the name Fondcenter and have operations in Europe, Switzerland as Asia. It will have $230bn in assets under administration.
UBS will hold a 48.8% stake in the combined group and also have the option to sell this minority holding to Clearstream eventually.
Moreover, the pair will ink commercial cooperation arrangements.
These long-term arrangements are aimed at serving the Swiss bank’s Global Wealth Management and Asset Management units along with the Corporate and Institutional Clients arm of Personal & Corporate Banking.
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By GlobalDataThe Swiss bank anticipates the transaction to deliver a post-tax gain of nearly $600m as well as a CET1 capital increase of around $400m.
Clearstream, the post-trade services provider of Deutsche Börse Group, will absorb Fondcenter’s staff. The leadership team will assume senior roles in the consolidated group.
UBS AM president Suni Harford said: “With the increased breadth of capabilities and Clearstream’s long-term commitment to develop the combined business, we are creating a highly compelling proposition for our clients.
“At the same time, this move enables us to further focus the Asset Management business on the execution of our strategic priorities to drive further profitable growth.”
Clearstream chairman Stephan Leithner expects “significant synergies” from the business combination.
Referring to the deal, Leithner noted: “Our distributor customers will benefit from extended global fund provider coverage, while asset manager clients will have direct access to UBS GWM premier distribution network as well as access to Clearstream distribution reach.”
