EFG International has agreed to acquire Swiss bank BSI from Brazil’s Grupo BTG Pactual in a cash and shares transaction valued at CHF1.33bn.
The combined BSI and EFG business will create one of the largest private banks in Switzerland, with around CHF170bn in assets under management and 860 relationship managers globally.
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The purchase price includes CHF975m in cash, and 52.6 million shares in EFG International.
EFG said in a statement that it expects to finance the deal by raising CHF500m in equity and CHF250m in Additional Tier 1 capital instruments.
This transaction will create significant cost savings of about CHF185m before tax by 2019 and contribute to EFG’s earnings per share from 2018, the company added.
Upon closing, BTG Pactual will hold between 20-30% of the combined entity and will receive a cash payment of around CHF1bn.
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By GlobalDataEFG Group will become the largest shareholder in the combined company with more than 35%, EFG said in a statement.
Subject to shareholder and regulatory approvals, the deal is scheduled to complete in the fourth quarter of 2016.
EFG International CEO Joachim Straehle 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."
BSI CEO Stefano Coduri said: "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."
