Rothschild & Co and Compagnie Financière Martin Maurel have unveiled plans to merge in order to establish one of the largest independent private banks in France.
The new entity would manage €34bn in assets and provides wealth management, asset management, financing and corporate finance advisory services.
It would operate under the name Rothschild Martin Maurel in France.
Rothschild & Co’s supervisory board and Compagnie Financière Martin Maurel‘s board of directors have both favourably welcomed an eventual merger.
Compagnie Financière Martin Maurel is currently owned at 88% by the holding company of Martin Maurel’s group.
The deal is subject to the approval of the shareholders of both companies and of the authorities.
The companies specified in a joint statement that the merger proposals should be put before general meetings of Compagnie Financière Martin Maurel and Rothschild & Co in September 2016.
The deal is expected to be closed by the end of 2016.
The transaction would take the form of a merger between Rothschild & Co and Compagnie Financière Martin Maurel.
“Shareholders in Compagnie Financière Martin Maurel would be offered either 126 Rothschild & Co shares per existing share or prior to the completion of the merger, be able to sell their Compagnie Financière Martin Maurel shares in cash.
“The Maurel family would receive Rothschild & Co shares and as a result of the merger, would replace Compagnie Financière Martin Maurel in the extended family concert,” said the firms.
Compagnie Financière Martin Maurel’s value is estimated at €240m.
The transaction would be financed by a mixture of newly issued Rothschild & Co shares, Rothschild & Co’s own cash resources and external credit facilities.
Martin Maurel’s group, established in 1825, has almost €10bn of AUM of which private banking assets accounted for €7bn at the end of 2015.
Headquartered in Marseille, it has offices in regions such as Provence-Cote d’Azur, Paris and Rhone-Alpes.
The private banking and asset management activities of Rothschild & Co manage around €24bn in assets including €10bn in private banking.
Rothschild’s private banking activity relies on two pillars: wealth structuring and discretionary portfolio management.
Bernard Maurel, president and CEO of Compagnie Financière Martin Maurel said : “More than ever, we are committed to serving our customers in keeping with the values that have ensured the longevity of our company.
“We share these values with the Rothschild & Co family to whom we have been close for three generations. We believe that the combination of our two groups would strengthen the model of the independent family bank. This alliance would enhance our expertise to benefit our clients and our teams, and to face future challenges with confidence.”
David de Rothschild, Chairman of Rothschild & Co, commented: “Our two companies share an independent family model that is a real strength when compared to our competitors. This transaction would strengthen and ensure the continuity of this model.”
“I am convinced that Rothschild & Co’s private banking and asset management would be enriched by the expertise that the Martin Maurel group brings, and that together through our shared history, our common values and our long-term vision, we would continue to bring the best service to our customers and strengthen our leading position in private banking.”