Swiss private banking group Julius Baer Group Ltd. (JBAXY.PK,JBARF.PK) said it has consented to buy Merrill Lynch's International Wealth Management business, or IWM, based outside the US with $84 billion of assets under management, or AuM, as of June 30, 2012 and over 2,000 employees, including more than 500 financial advisers.
According to Julius Baer, the transaction is a combination of legal entity acquisitions and business transfers, that by the end of the expected two-year integration period, is currently estimated to result in additional AuM of between CHF 57 billion and CHF 72 billion, of which around two thirds from growth markets. Assuming CHF 72 billion AuM transferred, Julius Baer's existing AuM as of June 30, 2012 would increase by about 40% to CHF 251 billion and its total client assets to CHF 341 billion, both on a pro forma basis.
Under the deal, Julius Baer and Bank of America Corp.'s (BAC) Bank of America Merrill Lynch, or BofAML, have agreed to enter into a cooperation agreement whereby BofAML will provide certain products and services to Julius Baer, including global equity research. Besides, there will be cross-referral of clients between both organisations.
Julius Baer stated that the acquisition is expected to be earnings accretive from the third full-year following principal closing, i.e. the first full steady-state year following integration. Irrespective of the AuM transferred between CHF 57 billion and CHF 72 billion, the earnings per share accretion target in 2015 is approximately 15%.
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