Investment Bank

Merger and acquisitions

Merger and acquisition activity was depressed in first quarter 2008 by the deteriorating credit environment and volatile debt and equity markets. In first quarter 2008, UBS advised globally on 78 transactions with a deal volume of USD 85.6 billion. Key deals in the quarter included:

- joint financial advisor to International Paper on its USD 6.0 billion purchase of Weyerhaeuser's packaging business;

- joint financial advisor to Zinifex on its AUD 12.0 billion merger with Oxiana, creating Australia's third largest diversified mining company; and

- sole financial advisor to Anglo American on the proposed USD 5.5 billion acquisition of a 51% interest in the MMX Minas-Rio and a 70% interest in the MMX Amapa Iron Ore Projects, from MMX Mineração e Metálicos.

Equity underwriting

Deal volumes of UBS's global equity capital markets were USD 7.2 billion in first quarter 2008, down 47% compared with the same period a year earlier. During first quarter 2008, UBS had a 5.9% market share of global primary equity products compared with 7.4% in first quarter 2007. Key transactions in first quarter included:

- advisor and joint bookrunner on the USD 19.7 billion initial public offering (IPO) for Visa, the largest IPO in US history;

- sole global coordinator, joint bookrunner, joint lead manager and joint sponsor of the USD 1.05 billion IPO for Want Want China, a leading snack-food manufacturer, on the Hong Kong Stock Exchange; and

- sole bookrunner, financial advisor and sponsor for the GBP 288 million rights issue for the Paragon Group, a UK specialist buy-to-let mortgage lender.

Fixed income underwriting

Primary markets remained challenging with investors selectively participating in new issues, generally at spreads much wider than secondary levels. Traditional leveraged loan and high yield primary activity was light, with higher quality deals and favored sector deals representing the majority of calendar volume.

UBS's market share of primary investment grade bond issues was 4.6%, up from 4.2% for full year 2007 despite underwriting 44% less volume in underwriting than in first quarter 2007, in line with the market. UBS lead managed 99 deals during the quarter including:

- joint bookrunner on Kraft Food's EUR 2.8 billion multi-tranche issue to finance the acquisition of Danone;

- joint bookrunner in the USD 4.4 billion financing for the demerger of Dr. Pepper Snapple Group from the global confectionery business of Cadbury Schweppes; and

- lead manager on a RMB 6.5 billion multi-tranche issue for Shenzhen Development Bank, China's second largest sub-debt deal.