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Credit Suisse/Baer tie-up talk

Monday, September 01, 2014 - 01:34

Speculation that the private Swiss bank Julius Baer could become a takeover target for larger rival Credit Suisse moved markets last week. But as Sonia Legg reports some are now questioning the financial benefits of a tie-up.

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Julius Baer is worth nearly $10 billion - and reports that Credit Suisse is interested in taking it over added value. The private bank's shares rose two percent last week after a Swiss finance blog said a takeover was one of a number of options under consideration. There's been no official comment from either side. And Chris Hughes from Reuters Breakingviews says a tie-up makes no financial sense. (SOUNDBITE) (English): CHRIS HUGHES, REUTERS BREAKINGVIEWS, SAYING "Julius Baer is actually quite an expensive stock to begin with - strategically what would it actually do for Credit Suisse? Why would Credit Suisse actually want to get bigger? It's not obvious going through all of the risks, integrating systems, in fact bringing together two very different cultures is really worth taking." The speculation followed the resolution of a U.S. investigation into the role Swiss banks played in helping wealthy Americans evade their taxes. Credit Suisse agreed to pay $2.5 billion in May. And Julius Baer is still involved in a criminal investigation. (SOUNDBITE) (English): CHRIS HUGHES, REUTERS BREAKINGVIEWS, SAYING: "Both companies have got big issues to face on their own - the big one with Credit Suisse is what's going on with succession planning, around Brady Dougan, who has been there seven years now, and recently he has had quite a tough time and Julius Baer has outstanding issues in the US. They've got a lot on their plates - the distraction of a merger is really not going to help." Financial regulators may not approve either. Julius Baer is still integrating its last big acquisition, Merrill Lynch's overseas arm.

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Credit Suisse/Baer tie-up talk

Monday, September 01, 2014 - 01:34