Swiss private banking group EFG International (EFGI) has completed the acquisition of BSI from BTG Pactual for a preliminary purchase price of CHF1.06bn (€977.3m).
EFG International’s assets under management with the purchase of BSI are estimated at CHF148bn (€136.4bn) as of 31 October 2016.
In detail, the group has provided CHF575m in cash and issued 86.2 million EFG shares valued at CHF454m as well as CHF31m of AT1 instruments to close the deal.
Some 287.2 million of EFG International shares have been issued in total. EFG Group remains EFG International’s largest shareholder with a stake of 44.2% post-closing, while BTG Pactual will hold a stake of 30.0%.
After completion of the transaction, EFG International’s capital ratios remain in line with regulatory requirements, showing a Swiss GAAP Common Equity Ratio (CET1) of 16.8% and Total Capital Ratio of 19.4%.
BTG Pactual will pay compensation to EFG International against certain known liabilities and damages relating to breaches of any representations and warranties, covenants, obligations and other matters related to specific legal cases.
“As a security for potential indemnification claims by EFG International, 51 million EFG shares have been transferred into a Swiss escrow account and will be locked up for two years,” said EFG International.
Regarding the future of the combined business of EFG International and BSI, EFG International explained that BSI will operate as a separate subsidiary within EFG International’s holding structure for a limited time, until its full legal integration, expected in the second quarter 2017.
“As previously announced, full operational integration of BSI in Singapore, by way of an accelerated asset deal, will take place by the end of November 2016. A review of clients has taken place (in conformity with FINMA and MAS rules), and the process of transfer of assets through client novation and transfer of CROs and other staff is in progress,” said the Swiss group.
BSI’s companies will be integarated within EFG International “through several legal mergers and asset deals, depending on the location of the business and other operating considerations.”
EFG International specified that a joint decision has been taken to follow a single brand strategy globally by building on the existing EFG name.
The process of developing the renewed brand positioning and logo is ongoing and should be completed by mid-2017.
EFG International will have full management control of BSI, effective as from 1 November 2016.
The Board of Directors of BSI includes the following members:
- Joachim H. Straehle (Chairman), CEO of EFG International
- Giorgio Pradelli, Deputy CEO and CFO of EFG International
- Peter Fischer, Head of Strategy of EFG International
- Rudy Van Den Steen, former CFO of EFG International from 2000 to 2010
In addition, Thomas Mueller has been appointed CEO of BSI. He was formerly an executive committee member of various financial institutions, including of Banca del Gottardo from 2002 to 2005.
Joachim Straehle, CEO of EFG International, commented: “The closing of the acquisition marks a historic milestone for both EFG International and BSI. Together we are forming a leading pure play private bank with strong Swiss roots, a broad international presence and an entrepreneurial spirit.
“Over the coming months, we will jointly drive forward the integration to realise the full benefits of the business combination for our clients, employees and shareholders. The combined group will have a solid capital and liquidity position, which will support the further development of the business.”