At the beginning of the year, UBS wanted to take over the American fintech platform Wealthfront for $1.4 billion. Now the planned merger is cancelled. The reasons are unclear.
UBS boss Ralph Hamers cancels acquisition of fintech company Wealthfront.
The major Swiss bank UBS renounces the multi-billion takeover of the American robo-advisor Wealthfront. It was mutually agreed with Wealthfront to terminate the merger agreement announced on January 26, 2022, UBS announced late Friday evening.
UBS did not provide any specific information about the reason for this separation before the marriage. The integration of Wealthfront as a subsidiary of the UBS Wealth Management division was actually planned for the second half of the year. According to earlier information, the Californians have 470,000 customers and manage assets of just over $27 billion.
reasons unclear
The statement only states, without obligation, that UBS “is committed to its growth plan in the USA and will continue to expand its range of digital wealth management”. The major bank also announced that it would purchase a $69.7 million note convertible into Wealthfront stock.
The failed takeover is a setback for UBS boss Ralph Hamers, who was appointed to the top of the group in 2020, not least because of his experience in digital banking. He had a reputation as a “Google banker”.
Win the smartphone generation as customers
With Wealthfront, UBS wanted to attract aspiring young rich generation Y and Z, those born between 1980 and 2010, as clients. They often prefer banking on their cell phones. It remains to be seen whether UBS will invest in new online banking solutions itself or buy the skills and platforms elsewhere.
Other international banking groups such as JP Morgan Chase, Goldman Sachs and Morgan Stanley also want to address a new, younger clientele with fintech solutions.