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Exhibit 99.1
UBS AND PAINEWEBBER COMPLETED THEIR MERGER ON 3RD NOVEMBER CREATING A PREEMINENT
GLOBAL INVESTMENT SERVICES FIRM. THE TOTAL COST OF THE TRANSACTION TO UBS WAS
USD 11.8 BILLION.
UBS and PaineWebber completed their merger on 3rd November 2000. "I am pleased
with the speedy and successful completion of the merger. The smoothness with
which it has been accomplished means we can now concentrate on rapid value
creation for our employees, clients and shareholders", commented Marcel Ospel,
President and Chief Executive Officer of the UBS Group, "With PaineWebber
becoming an integral part of the UBS Group, we are exceptionally well placed in
wealth management in the United States as well as the rest of the world. The
combination of PaineWebber's client franchise and UBS's product range unlocks
immense opportunities for growth. Our two organizations are an excellent
strategic fit."
The combination of UBS Warburg and PaineWebber creates a world-class investment
services firm employing 39,000 people, 28,000 of them in the United States.
PaineWebber brings 2.7 million new clients to UBS's customer franchise and
approximately CHF 865 billion in client assets.
PaineWebber will be an integral part of the UBS Warburg business group.
PaineWebber's private clients and asset management businesses will continue
under their current management and will absorb all UBS Warburg's existing
private client activities, including about 1500 employees. The PaineWebber brand
will be retained for all US private client business. The capital markets
activities of PaineWebber are being integrated fully and rapidly with those of
UBS Warburg, including the transfer of approximately 1600 employees after
rationalization, and a full review of options to consolidate premises. UBS
expects all these businesses to be fully integrated before the end of this year.
FINANCING THE PAINEWEBBER TRANSACTION
In completing the transaction, UBS acquired a total of 163.8 million PaineWebber
shares for a total consideration of USD 11.8 billion (CHF 20.8 billion), based
on the closing UBS share price on the SWX Swiss Exchange on 3rd November 2000 of
CHF 252.5 per share, and a CHF/USD exchange rate of 1.762.
In accordance with the terms of the Merger Agreement, the consideration was
satisfied by the delivery of 40.6 million UBS shares and a cash payment of USD
6.0 billion (CHF 10.6 billion). Final results of the proration of cash and share
elections will be published on 7th November 2000 via the website:
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www.ubs.com/investor-relations.
As previously announced, UBS has chosen to make an initial issuance from
authorized capital of 12 million ordinary shares, as well as re-issuing 7
million ordinary shares currently held in Treasury. The remaining shares
delivered at the completion of the merger have been borrowed.
Following the exercise of options by PaineWebber employees, 12.7 million
PaineWebber options remain outstanding and will be converted into 6.3 million
new UBS options, with an implied economic value of USD 0.5 billion (CHF 1.0
billion). As a result of the exercise of options, PaineWebber has received cash
proceeds of USD 0.5 billion (CHF 1.0 billion).
Based on the value of the consideration paid to PaineWebber shareholders and the
implied economic value of the converted options, less the receipt of option
exercise proceeds, the total economic cost of the transaction to UBS is
estimated to amount to USD 11.8 billion (CHF 20.8 billion).
TREASURY SHARE REPURCHASE PROGRAM
Following the end of restrictions in force during the PaineWebber merger
process, UBS is now free to resume normal capital management activities, and it
intends to start today a Treasury share repurchase program that will run until
June 30th 2001 at the latest. Any shares that are repurchased will be used for
Treasury purposes, and will not be cancelled.
The strong market positioning of UBS's business groups drives strong cashflow
generation which can lead to levels of capital in excess of that required for
building its core businesses. As with its previous repurchase programs, UBS will
mitigate this capital build-up by selectively investing in its own shares. UBS
is and intends to remain one of the best-capitalized financial institutions in
the world.
UBS will restrict its total daily repurchases to 25% of the average world-wide
daily traded volume over the preceding 30 business days.
In order to ensure maximum transparency and clarity for investors, UBS will
publish the amount of Treasury shares repurchased every ten business days, as
well as upon termination of the program.
Zurich / Basel, 6 November 2000
UBS
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS:
This press release contains statements that constitute "forward-looking
statements", including, without
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limitation, statements relating to the implementation of strategic initiatives,
including the implementation of the integration of PaineWebber into UBS, and
other statements relating to our future business development and economic
performance. While these forward looking statements represent our judgments and
future expectations concerning the development of our business, a number of
risks, uncertainties and other important factors could cause actual developments
and results to differ materially from our expectations. These factors include,
but are not limited to, (1) general market, macro-economic, governmental and
regulatory trends, (2) movements in local and international securities markets,
currency exchange rates and interest rates, (3) competitive pressures, (4)
technological developments, (5) changes in the financial position or credit
worthiness of our customers, obligors and counterparties, and (6) our ability to
carry out the integration of PaineWebber into UBS within the scheduled timeframe
and to achieve the anticipated resulting benefits of the merger.
Other key factors that we have indicated could adversely affect our businesses
and financial performance are contained in our past and future filings and
reports, including those filed with the United States Securities and Exchange
Commission (the "SEC"). Additional information concerning factors that could
cause such a difference can be found in UBS's Second Quarter 2000 Report and
other filings made by UBS or Paine Webber with the SEC. Neither UBS nor
PaineWebber are under any obligation to (and each expressly disclaims any such
obligations to) update or alter its forward-looking statements whether as a
result of new information, future events or otherwise.
