Swiss private banking group EFG International is to acquire the Lugano based private bank BSI, according to an agreement signed on 21 February 2016 with BSI’s sole shareholder BTG Pactual.
Together, EFG and BSI will manage around CHF170bn (€154.4bn) in assets and are to become the fifth largest private bank in Switzerland.
The EFG International annual general meeting, scheduled on 29 April 2016, shall result in a shareholder approval for the transaction.
Regulatory approvals are to be obtained either in Q3 or Q4 2016.
The deal is to be closed in Q4 2016 with the issuance of new shares subscribed by BTG Pactual.
At end 2017, BSI will entirely merge into EFG International.
“Consideration for the purchase of BSI has been agreed to be paid in cash for a total of CHF 975 million, and through issuance of 52.6 million EFG shares to BTG Pactual against contribution in kind, subject to certain adjustments in case of dilution,” EFG International specified in a press release.
BTG Pactual will have a stake of around 20% in EFG International and representation on its board of directors, subject to shareholder approval. EFG Group will remain the largest shareholder of BSI with an over 35% stake.
Applying EFG’s closing price of CHF6.70 (€6.09) on 19 February 2016 to the 52.6 million shares, the total purchase price would amount to approximately CHF1.33bn (€1.20bn), including agreed adjustments currently estimated at CHF25m (€22.7m).
Founded in Lugano in 1873, BSI is one of the oldest banks in Switzerland, managing CHF88bn (€79.9bn) in assets, with a focus on Switzerland, Italy and emerging markets.
BSI’s global presence includes booking centers in Switzerland, Milan, Paris, Monaco, Luxemburg, Singapore, Hong Kong, Panama, and an office in Bahrain.
EFG International was founded in Zurich in 1995, managing CHF83.3bn (€75.7bn) in assets.
Its largest shareholder (currently 54%) has been EFG Bank European Financial Group (EFG Group), a Swiss holding bank based in Geneva ultimately controlled by the Latsis family interests.
EFG’s main booking centers include Switzerland, the UK, Madrid, Monaco, Luxemburg, Hong Kong, Singapore and Miami.
Joachim Straehle, CEO of EFG International, said: “By combining the complementary strengths of BSI and EFG, we are forming a leading global private bank with strong roots in all language regions of Switzerland.
“Building on the great talent at both banks, BSI’s long-standing experience and EFG’s entrepreneurial spirit, we will provide a powerful value proposition to clients and employees alike. We are offering our shareholders attractive prospects, and the transaction is in the best interest of the Swiss financial center.”
Stefano Coduri, CEO of BSI, commented: “By joining forces with EFG we will be creating one of the leading Swiss private banks, with greater scale and capabilities that will enhance our competitiveness in the new global private banking landscape.
“With this combination, we are laying solid foundations for longterm stability and further sustainable growth by leveraging the strong competencies we have in Ticino, Switzerland and globally.
“This transaction is in the best interest of clients and employees, and we look with great anticipation to the opportunities that the new bank will create for both.”