The new investment bank will combine the strengths of both companies with local and international resources
Switzerland-based financial services firm UBS and Banco do Brasil have signed an agreement to establish a new partnership to offer investment banking and institutional securities brokerage services in Brazil and certain South American countries.
The collaboration is expected to enable South American clients to access M&A and advisory capabilities, debt and equity capital markets, and a wide network of corporates and investors, along with institutional securities brokerage and research.
The new investment bank, to be jointly established subject to regulatory approvals, will combine the strengths of both companies with local and international resources.
UBS Group chief executive officer Sergio Ermotti said: “This transaction captures a unique opportunity to combine two strong partners with complementary strengths. It will also allow us to better serve our clients in Latin America and around the world while unlocking value for our respective shareholders.”
Banco do Brasil chief executive officer Rubem Novaes said: “Banco do Brasil has extensive experience building profitable partnerships. This partnership is in line with our strategy of improving the return for our shareholders and providing sophisticated products to our clients.”
UBS will hold 50.01% stake and Banco do Brasil 49.99%
The new investment bank is planned to be established by combining the assets of both companies, where UBS will contribute its operational investment banking platform in Brazil and Argentina, along with its institutional brokerage business in Brazil.
Banco do Brasil is expected to leverage strong client relationships, expertise in local corporate and investment banking, fixed income capital markets, and has a proven track record of Brazilian ECM, project finance, and M&A advisory transactions.
In addition, Banco do Brasil’s corporate bankers are expected to work with the professionals of the new investment bank to provide a comprehensive portfolio of products and services to clients in Brazil.
Under the terms of the agreement, both companies will appoint three board members each. Banco do Brasil will appoint a chairperson, while UBS will appoint the vice-chairperson and CEO.
Banco do Brasil will also appoint an officer, who will hold the responsibility for the relationship between Banco do Brasil’s customer base, corporate bankers and the newly formed investment bank.
UBS Brazil country head Sylvia Coutinho said: “We look forward to working with Banco do Brasil to provide market-leading investment banking products and services to our current and prospective clients in the region. This endeavor is a clear demonstration of UBS’s commitment to expanding our business in South America with a bank that has a strong track record partnering with financial services firms.”
Banco do Brasil CFO Carlos Hamilton said: “The generation of synergies and efficiencies in the banking business is aligned with the main goal of value creation for our customers and shareholders.”