UBS-Wealthfront Deal Reportedly Shot Down by Shareholders, US Regulators
Swiss bank UBS reportedly dropped its bid for U.S. wealth-management operation Wealthfront last month due to pushback from shareholders and U.S. regulators.
When UBS and Wealthfront stated last month that they were calling off the planned deal, neither organization publicly gave a reason. However, some of the big investors were opposed to the deal because they believed UBS could build its own platform for less than it was paying to gain access to Wealthfront’s, Reuters reported Sunday (Oct. 2), citing a report from Swiss newspaper SonntagsZeitung.
“According to several sources, U.S. authorities also raised concerns,” the paper reported, per Reuters. “UBS has a long history of scandals in the United States. Against this background, U.S. authorities were apparently not comfortable with the deal.”
According to Reuters’ account of the SonntagsZeitung article, there weren’t any problems between between UBS Chief Executive Ralph Hamers and UBS Chairman Colm Kelleher, who joined the bank’s board after the Wealthfront deal was announced.
When the UBS-Wealthfront deal was announced in January 2022, the companies valued the all-cash transaction at $1.4 billion. Wealthfront was to bring to the arrangement 470,000 clients and $27 billion in assets under management.
See also: Switzerland’s UBS Buying Wealthfront for $1.4B
“UBS will accelerate its growth ambitions in the U.S., broaden the firm’s reach among affluent investors and expand its distribution and capabilities,” the two companies said in a statement.
At the time, Hamers said that Wealthfront’s capabilities and client base would “significantly boost our ability to grow our business in the U.S.,” adding: “Wealthfront complements our core business in the U.S. providing wealth management to high net worth and ultra high net worth investors through trusted relationships with financial advisors, and will enhance our long-term ambition to deliver a scalable, digital-led wealth management solution to affluent investors.”
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