Julius Baer has signed an agreement to purchase Commerzbank International SA Luxembourg (Cisal), a fully-licensed private bank, which has about EUR3bn in assets under management for approximately EUR68m.
As per the terms of the deal, Julius Baer will pay approximately EUR68m to Commerzbank, of which EUR25 million is assumed to be regulatory capital.
The agreement, which would be accretive to adjusted earnings after closing, will expand Julius Baer’s position in the Luxembourg financial centre.
Julius Baer said in a statement that total restructuring and integration costs are expected to amount to EUR20m.
Subject to approval by the regulatory authorities, the deal is scheduled to take place in the summer of 2016.
Upon completion of the deal, Julius Baer’s Luxembourg-based business will manage total assets of around CHF5bn on a pro forma basis.
Julius Baer CEO Boris Collardi said: "The acquisition of a fully-licensed bank in Luxembourg as well as the Temenos-based booking centre and the related IT expertise provide us with important strategic flexibility for our European businesses.
"Furthermore, it strengthens the implementation of our global banking platform project by aligning Europe with our Swiss and Asian platform strategy, thus reducing the execution risk."
Julius Baer region head Northern, Central and Eastern Europe Gian Rossi said: "We are pleased to add significant scale to our local franchise in the important international financial centre of Luxembourg and look forward to leveraging the business opportunities provided by the full bank licence."