page_title: Union Bank of Switzerland
section_title: Merger with Swiss Bank Corporation
hierarchical_section_title: Union Bank of Switzerland / History / Merger with Swiss Bank Corporation
caption_attribution_description: 瑞银集团苏黎世总部
context_page_description: Union Bank of Switzerland was a Swiss investment bank and financial services company located in Switzerland. The bank, which at the time was the second largest bank in Switzerland, merged with Swiss Bank Corporation in 1998, to become UBS to form what was then the largest bank in Europe and the second largest bank in the World.
  UBS was formed in 1912 through the merger of the Bank in Winterthur and Toggenburger Bank, both founded in the early 1860s. UBS then continued to grow through acquisitions, including Aargauische Kreditanstalt in 1919, Eidgenössische Bank in 1945, Interhandel Basel in 1967, Phillips & Drew in 1986, and Schröder, Münchmeyer, Hengst & Co. in 1997 among others.
  The historical UBS logo comprises the initials "UBS" horizontally, referring to the "Union Bank of Switzerland", "Union de Banques Suisses" or "Unione di Banche Svizzere", crossed by vertical "SBG", referring to the name of the bank in German "Schweizerische Bankgesellschaft". "UBS" ceased to be considered a representational abbreviation for the Union Bank of Switzerland after the bank's 1998 merger with Swiss Bank Corporation and is today considered a standalone brand.
context_section_description: During the mid-1990s, UBS came under fire from dissident shareholders, critical of bank's relatively conservative management and lower return on equity.  Martin Ebner, through his investment trust, BK Vision became the largest shareholder in UBS and attempted to force a major restructuring of the bank's operations.  The battles between Ebner and UBS management proved a distraction to the bank in the mid-1990s. Looking to take advantage of the situation, Credit Suisse approached UBS about a merger that would have created the second largest bank in the world in 1996.  UBS's management and board unanimously rebuffed the proposed merger.  Ebner, who supported the idea of a merger, led a major shareholder revolt that resulted in the replacement of UBS's chairman, Robert Studer.  Studer's successor Mathis Cabiallavetta would be one of the key architects of the merger with Swiss Bank Corporation.
  On 8 December 1997, Union Bank of Switzerland and Swiss Bank Corporation announced an all-stock merger. At the time of the merger, Union Bank of Switzerland and Swiss Bank Corporation were the second and third largest banks in Switzerland, respectively both trailing Credit Suisse.  Discussions between the two banks had begun several months earlier, less than a year after rebuffing Credit Suisse's merger overtures.
  The all-stock merger resulted in the creation UBS AG, a huge new bank with total assets of more than US$590 billion.  Also referred to as the "New UBS" to distinguish itself from the former Union Bank of Switzerland, the combined bank became the second largest in the world, at that time, behind only the Bank of Tokyo-Mitsubishi.  Additionally, the merger pulled together the banks' various asset management businesses to create the world's largest money manager, with approximately US$910 billion in assets under management.
  The merger, which was billed as a merger of equals, resulted in UBS's shareholders receiving 60% of the combined company and Swiss Bank's shareholders receiving the remaining 40% of the bank's common shares. UBS's Mathis Cabiallavetta became chairman of the new bank while Swiss Bank's Marcel Ospel was named chief executive officer.  However, it quickly became evident that from a management perspective, it was Swiss Bank that was buying UBS as nearly 80% of the top management positions were filled by legacy Swiss Bank professionals.  Additionally, UBS professionals suffered more headcount reductions, particularly in the investment banking unit where there were heavy cuts in the corporate finance and equities businesses.  The more severe cuts at UBS were an acknowledgment that prior to the merger Swiss Bank Corporation had built a global investment banking business, Warburg Dillon Read through its acquisitions of Dillon Read in New York and S.G. Warburg in London. Swiss Bank was generally considered to be further along than UBS in developing its international investment banking business, particularly in the higher margin advisory businesses where Warburg Dillon Read was considered to be the more established platform.  UBS, on the other hand had a stronger retail and commercial banking business in Switzerland and both banks had notably strong asset management capabilities.
  After the merger was completed, it was widely speculated that a series of losses suffered by UBS on its equity derivative positions in late 1997 was a contributing factor in pushing UBS management to consummate the merger.  It would become clear that the derivatives losses prompted UBS to accept the terms proposed by Swiss Bank more readily than they otherwise would have.
caption: The Union Bank of Switzerland's principal office at Bahnhofstrasse 45 in Zurich served as the headquarters for the combined bank.
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