By Martin Gelnar
(Updates earlier item with detail, background, analyst comment and share price.)
ZURICH (MarketWatch) -- UBS AG /zigman2/quotes/206172872/composite UBS -1.96% Wednesday said it plans to acquire French asset manager CCR from Commerzbank AG /zigman2/quotes/202066109/composite CRZBY -2.59% for around EUR435 million, setting the first deal under new chief executive Marcel Rohner.
UBS, Switzerland's largest bank and the world's leading asset manager, expects the transaction to close in the first quarter of 2008 following regulatory approvals.
CCR had EUR17 billion in invested assets mid-2007 and a staff of 190. The acquired company, which is active in equity and fixed-income funds as well as in private client operations, will be integrated into UBS' French asset and wealth management arm.
The deal is in line with UBS' push into European onshore activities, a strategist said, noting that the purchase price is "pocket money" for the bank.
"The deal isn't big but the fact that UBS is back as a buyer is a positive signal," Sal. Oppenheim analyst Javier Lodeiro said, referring to a recent string of negative news from UBS. He confirmed a buy rating and a price target of CHF81.
UBS, the world's largest asset manager but also known for its global investment banking, has in the past few years invested billions of Swiss francs in small to mid-size acquisitions in Germany, France, the U.K. and southern Europe.
At 0835 GMT, UBS shares were down 0.5% or CHF0.30 at CHF63.50, in a slightly lower general market. They have dropped 14% so far this year.
Commerzbank shares were EUR0.2 lower, or 0.6% at EUR29.18.
Commerzbank, Germany's second-biggest bank, said it will book a EUR150 million gain from the sale. The transaction concludes Commerzbank's exit from non-German asset management operations, a move which included divestment in Japan and the U.K. The selling price, corresponding to 2.6% of managed assets, is in line with market views, Merck Finck & Co said, reiterating a hold rating and a EUR34 price target.
UBS, which in the past few years thrived on new money inflows and soaring investment banking income, has lost some of its luster recently due to turbulent financial markets but also because of company-specific problems. Mid-year, chief executive Peter Wuffli had to step down, taking the blame for losses at UBS' in-house hedge fund Dillon Read Capital Management.
UBS' long-standing efforts to cater to wealthy clients in their home markets have been generally welcomed by financial analysts but some have voiced concern over the costly strategy.
The bank's acquisitions in the U.S., where it took over a wealth management company some years ago, and the closing of gaps in its fixed-income business, have also led to high costs.
"UBS has been criticized a lot about its European onshore strategy. But that business is profitable by now and profitability will likely increase further," Sal. Oppenheim's Lodeiro said.
UBS' second-quarter net profit was 5.62 billion Swiss francs ($4.8 billion), boosted by a CHF1.93 billion one-off gain from a divestment of a 20.7% stake in Swiss private bank Julius Baer Holding AG .
Company Web site: http://www.ubs.com
(Simon Steiner in Frankfurt contributed to the article.)