UBS, SBC in $25B merger
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December 8, 1997: 8:26 a.m. ET
Transaction to create one of world's largest financial services companies
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NEW YORK (CNNfn) - Union Bank of Switzerland and Swiss Bank Corp. agreed to merge their operations in a transaction valued at over $25 billion, creating one of the world's largest financial services companies, both banks said early Monday.
The combined bank will be named United Bank of Switzerland and will include the world's leading money management concern, with 1.32 trillion Swiss francs ($912.8 billion) in assets under management.
The merger will result an extensive restructuring, including the layoffs of about 13,000 people during the next four years. The combined bank will employ about 56,000 workers.
The restructuring is expected to cost nearly $5 billion and likely will be charged against 1997 profits, resulting in a net loss in the fiscal year.
Both boards already have approved the transaction. Special shareholder meetings have been scheduled for Feb. 3 and 4.
Under the terms of the agreement, UBS shareholders will receive five shares for each share held. Shareholders of SBC will receive 1-1/13 share for each share of stock.
At a news conference, officials cited nationalism as a primary reason for the tie.
"It is in the general interest that two strong and solid Swiss banks should join forces," said SBC Chairman Georges Blum.
"Individually, they might otherwise find themselves in partnerships where the Swiss interest could no longer be safeguarded to the same extent," Blum said.
Blum and UBS's Robert Studer both will step down as chairmen of their respective companies. UBS chief executive Mathis Cabiallavetta will become chairman of the new company. SBC Chief Executive Marcel Ospel will become the new CEO.
The merger, which still needs approval from Swiss and European Union officials, is expected to be completed by late May 1998.
-- by staff writer Robert Liu
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UBS
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