Swiss wealth manager UBS and Banco do Brasil have inked a binding agreement to set up a new investment bank in South America.
The pair signed a non-binding agreement on the same in September this year.
The new bank will deliver investment banking and institutional securities brokerage services in the region, covering Brazil.
In doing so, it will leverage the assets of both parties including UBS’s operational investment banking platform in Brazil and Argentina along with the bank’s Brazil institutional brokerage operations.
The new bank will also utilise Banco do Brasil’s exclusive access rights to its corporate clients.
Moreover, the partnership will tap UBS’s expertise in cash equities, exchange traded derivatives and Banco do Brasil’s capital markets distribution platform.
UBS Group CEO Sergio Ermotti said: “This transaction captures a unique opportunity to combine two strong partners with complementary strengths.
“It will also allow us to better serve our clients in Latin America and around the world while unlocking value for our respective shareholders.”
UBS will be the majority stakeholder in the bank, with a 50.01% holding with Banco do Brasil owning the remainder.
The board of the new entity will have equal representation from both parties. Three members from each firm will gain seats on the board.
Banco do Brasil will appoint the chairperson, as well as an Officer who will manage the relationship between its customers, corporate bankers, and the new bank.
UBS will be in charge of appointing the CEO and vice-chairperson.
Commenting on the alliance, Banco do Brasil CEO Rubem Novaes said: “This partnership is in line with our strategy of improving the return for our shareholders and providing sophisticated products to our clients.”