Merger with Union Bank of Switzerland Swiss Bank Corporation

aggressively pushing ahead various acquisitions, ubs mired in series of entanglements activist shareholders critical of bank s relatively conservative management. martin ebner, through investment trust, bk vision became largest shareholder in ubs , attempted force major restructuring of bank’s operations. groundwork merger of sbc , ubs laid mutual competitor, credit suisse had approached ubs merger have created second largest bank in world in 1996. ubs s management , board unanimously rebuffed proposed merger. ebner, supported idea of merger, led major shareholder revolt resulted in replacement of ubs s chairman, robert studer. studer s successor mathis cabiallavetta 1 of key architects of merger sbc.

the combined ubs logo incorporated ubs s name sbc s 3 keys symbol.

on december 8, 1997, union bank of switzerland , sbc announced all-stock merger. @ time of merger, union bank of switzerland , swiss bank corporation second , third largest banks in switzerland, respectively, both trailing credit suisse. discussions between 2 banks had begun several months earlier, less year after rebuffing credit suisse s merger overtures.

the all-stock merger resulted in creation ubs ag, huge new bank total assets of more us$590 billion. referred new ubs distinguish former union bank of switzerland, combined bank became second largest in world, @ time, behind bank of tokyo-mitsubishi. additionally, merger pulled banks various asset businesses create world s largest money manager, approximately us$910 billion in assets under management.

the merger, billed merger of equals, resulted in sbc s shareholders receiving 40% of bank s common shares , union bank s shareholders receiving 60% of combined company. sbc s marcel ospel named chief executive officer while union bank s mathis cabiallavetta became chairman of new bank. however, became evident management perspective, sbc buying ubs 80% of top management positions filled legacy swiss bank professionals. additionally, ubs professionals suffered more headcount reductions, particularly in investment banking unit there heavy cuts in corporate finance , equities businesses. prior merger, swiss bank corporation had built global investment banking business, warburg dillon read through acquisitions of dillon read in new york , s.g. warburg in london. sbc considered further along ubs in developing international investment banking business, particularly in higher margin advisory businesses warburg dillon read considered more established platform.

after merger completed, speculated series of losses suffered ubs on equity derivative positions in late 1997 provided sbc leverage required consummate merger. become clear derivatives losses prompted ubs accept terms proposed sbc more readily otherwise have.