10. Business Combinations

Schwab

On 29 October 2004, UBS acquired Charles Schwab SoundView Capital Markets, the Capital Markets Division of Charles Schwab Corp. (Schwab), for an aggregate cash consideration of USD 265 million. The business comprises equities trading and sales, including a third-party execution business, along with Schwab’s NASDAQ trading system. This business handles over 200 million shares a day in trade volume and makes a market in over 11,000 stocks. As part of the acquisition, UBS and Schwab have entered into multi-year execution service agreements for the handling of Schwab’s equities and listed options orders. The business was integrated in the Equities area of UBS’s Investment Bank.

Brunswick UBS

On 14 December 2004, UBS acquired from Brunswick Capital, who were equal partners in Brunswick UBS, an equity brokerage and trading, investment banking and custody joint venture in Russia, Brunswick Capital’s 50% stake in the joint venture. UBS paid to the sellers at closing a cash consideration of USD 99 million and will pay a further USD 66 million at the end of 2005 plus 20% of Brunswick UBS’s net profits for 2005. Formed in 1997, Brunswick UBS has developed a significant franchise in the Russian securities market, employing 120 people in Moscow.

Sauerborn

On 7 December 2004, UBS acquired Sauerborn Trust AG (Sauerborn), an independent German firm providing financial advisory services to individuals in the ultra-high net worth segment. Sauerborn has approximately EUR 6.3 billion of invested assets. UBS has merged its ultra-high net worth segment within the German wealth management business with the operations of Sauerborn to provide an expanded range of services and products to its clients and reap the benefits of synergies. UBS paid a cash consideration of approximately EUR 91 million at closing, and will pay a further EUR 42 million in three equal installments over the next two years.

Acquisitions announced during the fourth quarter and after the balance sheet date

American Express Bank
On 25 November 2004, UBS and American Express Bank (Luxembourg) S.A. signed an agreement for UBS to acquire American Express Bank’s private banking activities in Luxembourg. The business comprises approximately USD 385 million of assets and will be integrated into UBS’s Luxembourg operations. The transaction has been approved by the supervisory authorities and is expected to close during first quarter 2005.

Julius Baer North America
On 6 December 2004, UBS announced that it had signed an agreement to acquire Julius Baer’s wealth management operations in North America. The business manages over USD 4 billion of client assets, including some custodial assets, and employs 55 staff in four locations. The operations will be integrated into the Wealth Management & Business Banking Business Group and further strengthen UBS’s wealth management operations in the Americas. The transaction is expected to close at the beginning of second quarter 2005.

Dresdner Bank Lateinamerika
On 21 December 2004, UBS announced that it had signed an agreement to acquire wealth management operations from Dresdner Bank Lateinamerika (DBLA). The business managed invested assets from private clients worth EUR 4.8 billion at 30 June 2004. UBS will take on 137 staff, who currently work for DBLA in this business. DBLA is active in all important Latin American markets and will strengthen UBS’s position as a wealth management service provider for clients of that region. The transaction is subject to regulatory approvals and is expected to close in second or third quarter 2005.

Etra
On 10 January 2005, UBS announced that it signed an agreement with the shareholders of Etra SIM S.p.A. (Etra), an independent Italian financial intermediary firm, to acquire their company. Etra serves wealthy private and institutional clients in Italy, manages approximately EUR 500 million of client assets and employs 25 staff. The transaction is subject to approval by the Italian regulatory authorities, and is expected to close in within the next three months.

Siemens Real Estate Funds
On 20 January 2005, UBS announced that its Global Asset Management Business Group will acquire a 51% stake in the real estate fund business of Siemens Kapitalanlagegesellschaft mbH (SKAG), currently a wholly owned subsidiary of Siemens AG. The real estate fund business of SKAG manages three open-end real estate funds with a total fund volume of approximately EUR 2 billion. The transaction is subject to approval by the German regulatory authorities and is expected to close in second quarter 2005. The real estate fund business of SKAG will be renamed UBS Real Estate Kapitalanlagegesellschaft mbH and will be integrated into the Global Asset Management Business Group real estate organization.

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