Credit Suisse Agrees to Sell Part of Global Investors business to Aberdeen Asset Management in return for a 24.9% interest
Transaction advances Credit Suisse’s strategy to focus on core asset management businesses; greater alignment with integrated bank.
Zurich.-Credit Suisse today announced it had signed an agreement to sell part of its Global Investors (“GI”) traditional asset management business in return for up to 24.9% of the enlarged share capital of Aberdeen Asset Management. The stake is valued at approximately CHF 381 million (GBP 250 million) as of December 30, 2008. The sale comprises CHF 75 billion of assets under management and includes the majority of the GI business in Europe, the US, and Asia Pacific. As part of the transaction, Credit Suisse will have a seat on the Board of Aberdeen. The transaction is subject to customary closing conditions, including regulatory approvals in various jurisdictions and approval by Aberdeen shareholders, and is expected to close in the second quarter of 2009.
In Switzerland, Credit Suisse will maintain its market leading asset management franchise, while the management of a small number of Swiss-domiciled funds will transfer to Aberdeen. Credit Suisse will continue to operate its Global Investor business in Brazil and through its various joint ventures across the globe.
“We believe this transaction offers our clients a compelling opportunity, providing them with access to an enhanced suite of investment products provided by a premier manager that has historically had strong performance across many asset classes,” said Rob Shafir, CEO of Credit Suisse’s Asset Management Division.
He added: “This agreement enables us to focus our resources on our alternative investments, asset allocation, and Swiss businesses, where we have strong performance and critical mass, and which better align with our integrated banking model. It also enables us to maximize the value of our Global Investors business, as we announced we would do earlier this year, and benefit from our new partner’s advantages of scale in a consolidating marketplace.”
Aberdeen is one of the UK’s leading providers of institutional asset management services, and a top-tier active global manager of equities, fixed income and property assets in aggregated, closed and open-ended pooled structures. Aberdeen’s total assets under management were GBP 111 billion as of September 30, 2008.
In connection with the transaction, Credit Suisse expects a non-cash charge from the goodwill related to the operations being sold of approximately CHF 600 million. This goodwill charge has no impact on its tier 1 capital.
Credit Suisse’s stake in Aberdeen is subject to a purchase price adjustment which could result in Credit Suisse owning a stake of less than 24.9%. The sold business will be left with a minimum of GBP 20 million of net cash, which will also cover regulatory and working capital needs. Credit Suisse will generally be subject to a three year lock-up with respect to the Aberdeen shares, and a three year standstill, preventing Credit Suisse from acquiring more than 24.98% of Aberdeen’s share capital. Credit Suisse and Aberdeen have agreed to extend the existing Distribution Agreement to also include the business Aberdeen is acquiring under this transaction.
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