ZURICH - U.S. Stifel Financial Corp will acquire up to 55 branches of UBS Wealth Management Americas to expand across the United States in a deal that will boost the investment bank's profit in the first year.
St. Louis-based Stifel said its main unit -- brokerage Stifel, Nicolaus & Co Inc -- entered into an agreement with Swiss bank UBS AG's U.S. brokerage unit, UBS Financial Services, to buy the branches for an upfront cash payment of about $27 million.
UBS, Switzerland's number one bank and the world's leading wealth manager, said the affected branches were not strategic to its wealth management business in the United States.
We are focused on growing the Wealth Management Americas business in the high-net worth and ultra-high net worth segments and in gaining market share in locations with concentrated pools of wealth, UBS spokeswoman Tatiana Togni said in a statement.
The affected branches are not located in strategic locations, she added.
The deal also includes annual earn-out payments for the two-year period following the closing of the transaction and aggregate payments of up to $19 million for net fixed assets and certain employee incentives.
These payments will be based upon the number of financial advisers and branches acquired by Stifel, which has also agreed to acquire other client-related assets and assume certain liabilities related to these branches.
Stifel expects to close the deal during the third quarter.
Shares of Stifel closed at $40.83 Monday on the New York Stock Exchange. UBS shares were down 2 percent at 6:32 a.m. EDT amid falling bank stocks.
UBS is committed to growing its business in the United States and hired relationship managers in the last quarter of 2008, a move that led to inflows in the United States at the start of this year.
But the bank is also at the center of a damaging U.S. tax fraud probe. It agreed to pay $780 million in February to avert criminal charges.
For the alerts, double-click.
(Reporting by Shradhha Sharma in Bangalore; Additional reporting by Lisa Jucca in Zurich; Editing by David Cowell)