Valued at around €68m, the acquisition will bolster Julius Baer’s position in the Luxembourg financial center.
The acquisition of Commerzbank International Luxembourg includes client portfolios, transfer of employees, as well as a corresponding IT platform.
Of the agreed acquisition amount, around €25m will be paid in the form of regulatory capital.
Julius Baer said in a statement: "Total restructuring and integration costs are expected to amount to approximately €20m."
Commenting on the deal, Julius Baer CEO Boris F.J. Collardi said: "The acquisition of a fully-licensed bank in Luxembourg as well as the Temenos-based booking centre and the related IT expertise provide us with important strategic flexibility for our European businesses.
"Furthermore, it strengthens the implementation of our global banking platform project by aligning Europe with our Swiss and Asian platform strategy, thus reducing the execution risk."
Subject to regulatory approvals, the acquisition is expected to be completed next year.
Upon closing of the transaction, Julius Baer’s Luxembourg unit will manage total assets of around CHF5bn (€4.6bn) on a pro forma basis.
Julius Baer Northern, Central and Eastern Europe region head Gian A. Rossi said: "The acquired entity is a pure private banking business with a stable base of European clients and hence fits very well with Julius Baer’s business approach and strategy.
"We are pleased to add significant scale to our local franchise in the important international financial centre of Luxembourg and look forward to leveraging the business opportunities provided by the full bank licence."
Additionally, Julius Baer recently selected software company Temenos as its partner for planning its core banking platform renewal project.
In 2014, Commerzbank generated around €9bn in gross revenues with approximately 52,000 employees.
Image: Julius Baer has agreed to acquire Commerzbank’s wealth management unit in Luxembourg. Photo: courtesy of adamr / FreeDigitalPhotos.net.
