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UBS to Acquire Charles Schwab's Capital Markets Division

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UBS announced today that it will acquire Charles Schwab SoundView Capital Markets, the Capital Markets Division of Charles Schwab Corp., for $265 million (USD) paid in cash. The transaction is expected to close in the fourth quarter of 2004, subject to regulatory approval. The acquisition will be integrated in the Equities business of UBS's Investment Bank.

The business comprises equities trading and sales, including one of the leading third party execution businesses, along with Schwab's state-of-the-art NASDAQ trading system. The business currently handles over 200 million shares a day in trade volume and makes a market in over 11,000 stocks. With this transaction, UBS expects to become one of the top traders in NASDAQ securities. UBS is top 3 in the trading of NYSE-listed securities and is the largest secondary equities house worldwide.

As part of the sale, the parties have entered into a multi-year execution service agreement for the handling of Schwab's equities and listed options orders.

This transaction will add significant scale to UBS's business flow from third party brokers and on-line brokers, making UBS one of the top providers of execution services for US retail brokers.

John Costas, Chairman and CEO of UBS Investment Bank said: "This transaction is consistent with our organic growth plan in combination with targeted acquisitions to ensure the growth of our franchises. This will propel UBS to a leading position as a top trader of NASDAQ securities globally and further our goal of becoming a premier provider of services to private clients around the world. We are extremely pleased to be working in a collaborative partnership with Charles Schwab and are excited by the expansion of services to our own wealth management clients."


Commenting on the sale, Schwab Chairman and CEO, Charles R. Schwab said:
"The company has made the strategic decision to intensify its focus on Schwab's core business of serving individual investors and independent financial advisors who work with them. The sale of our capital markets business reflects an important outcome of that decision. A primary objective in the transaction was to establish a relationship that assures our clients will receive the same superior trade execution they have come to expect from Schwab, and we are very pleased to be able to partner with UBS to that end."

New York / Zurich /Basel, August 31, 2004
UBS