NAB To Acquire 80 Per Cent Stake In Goldman Sachs Australian Wealth Management Unit

Post by NeilMc on July 29, 2009 · Under Business News, Company News, Mergers & Acquistions, Wealth Management, banking · Comment

Australian banking major National Australia Bank (NAB) has agreed a deal with Sachs, to acquire an 80.1 per cent stake in the wealth management business of the investment bank’s Australian subsidiary Goldman Sachs JBWere’s in Australia and New Zealand for $99 million.

NAB will add to the acquisition price based on revenue performance related criteria for the business over the next three years.

Goldman’s will continue to own a 19.9 per cent stake in the unit which will operate under the JBWere brand according to a joint statement released by both companies on Wednesday.

NAB said that the business will not make any material contribution to the banking group’s return on equity during its first year.

The acquisition, which is subject to regulatory approval, is expected to vest by the end of this calendar year.

JBWere will become a portfolio company in NAB’s wealth management platform, joining MLC and NAB Wealth.

The unit will continue to focus on advisory activities for high net worth individuals and will distribute certain products from Goldman Sachs on either an exclusive or preferred basis.

Wealth Management advisers from JBWere will have the ability to access products, services and investment research from Goldman Sachs, NAB and MLC, the companies said in their statement.

NAB’s chief executive Cameron Clyne has identified wealth management as a key business that NAB is keen on both developing and expanding. Melbourne-based NAB, which this month raised $2 billion in fresh equity, is making acquisitions to boost fee income from overseeing wealthy client’s assets.

“JBWere’s pre-eminent reputation for providing wealth management services to high net worth individuals and NAB’s strong footprint in business and private banking is a great combination. JBWere adds to our capability and brands in that area.” Mr. Clyne said

JBWere has more than 22,000 clients with around $10 billion in funds under management, and A$38 billion in “assets under advice,” NAB said.

Goldman Sachs JBWere’s co-chief executive Stephen Fitzgerald said he believed that the unit would have the ability to provide both an expanded and highly competitive offering for clients, by combing the capabilities of the two companies.

“We are delighted to enter a strategic alliance where GSJBW retains a meaningful equity interest and distribution relationship in what will be an even stronger private wealth business,” he said.

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