AMSTERDAM/ZURICH Dutch cooperative Rabobank agreed to sell its majority stake in private Swiss bank Sarasin BSAN.S to Brazilian-Swiss private bank Safra for 1.04 billion Swiss francs ($1.13 billion), scuppering chances of a domestic tie-up sought by rival Julius Baer (BAER.VX).
The deal ended months of uncertainty as Rabo weighed whether and how to sell its stake in Sarasin.
"We now have clarity about our future," Sarasin Chief Executive Joachim Straehle said in a statement e-mailed to Reuters. "In Safra, we will have a new and well capitalized majority shareholder that will reinforce our strong position as an independent Swiss private bank under the Sarasin brand and that will support our business model."
The deal ended a bidding war for Sarasin involving its larger Swiss rival Julius Baer, Safra and, according to media reports, at least one other bank.
Sarasin had made it clear that it preferred other bidders over deal-hungry Julius Baer.
Uncertainty is toxic for private banks, whose clients put a premium on stability, consistency and discretion. As a result, protracted bidding wars are uncommon and hostile takeovers are practically unheard of.
Unlisted Rabobank was never a desperate seller and on Friday it left its reasons for selling unclear, although the sale is expected to buttress its AAA credit rating.
Experts had suggested the Dutch bank might be eager to avoid association with Swiss private banking, which is under fire from the United States and other countries over undeclared assets held by their citizens in secret accounts.
For its part, Sarasin has advocated a clean-asset strategy, pledging to rid its books of untaxed funds, and it has urged rivals to do the same.
Under the ownership of family-owned Safra, Sarasin hopes to continue to wield considerable influence over its own strategy and expansion.
Sarasin will be run independently within the stable of Safra-owned banks including Safra National Bank of New York, Safra Suisse and Banque J. Safra Monaco.
At first glance, Sarasin and Safra are a good match. While Sarasin has expanded in Asia and the Middle East, fertile hunting grounds for private banks targeting the newly wealthy, Safra's traditional markets are in the Americas.
Both banks operate in Europe, though overlap is limited. Safra owns banks in Luxembourg and Monaco, while Sarasin has concentrated on so-called European onshore growth markets such as Germany.
Swiss private banks are expected to begin joining up to offset higher costs and lower revenue as pressure increases on tax havens such as Switzerland.
The Sarasin deal is among the larger private bank deals in recent years. Previous deals include Julius Baer's purchase of Ehinger Armand von Ernst, Ferrier Lullin & Cie, BDL Banco di Lugano and asset manager GAM from UBS in 2005, and the 2002 merger of Geneva rivals Lombard Odier and Darier Hentsch.
The latest deal leaves Julius Baer, which has about 800 million Swiss francs to spend on deals, out in the cold. As recently as Wednesday the bank, which has embarked on a growth-by-acquisition strategy, was pleading its case to acquire Sarasin.
Safra said it will keep Sarasin listed following the deal's closing, which is expected in the spring.
Under Swiss securities law, Safra must make a public offer to buy out minority shareholders, though Safra indicated it does not intend to pursue more of Sarasin, and so "allow existing shareholders to continue to participate in the Sarasin growth story."
(Reporting By Sara Webb and Katharina Bart; Editing by Ted Kerr)