CLEVELAND (AFX) - Banking and financial services company KeyCorp said on Tuesday that it is selling its McDonald Investments branch network that it bought in 1998 to a unit of Swiss bank UBS AG for up to $280 million.
The network includes 51 McDonald Investments offices in 14 states. The final price will be determined before the deal closes in the first quarter of 2007 and will depend on several factors, including how many clients switch to UBS.
McDonald Investments, founded in Cleveland in 1924, manages about 165,000 accounts and client assets of approximately $30 billion.
The buyer is the UBS Financial Services unit of UBS AG, which said the deal will expand its U.S. wealth management business. 'This transaction is an excellent fit for UBS,' said Martin Hoekstra, head of UBS Wealth Management U.S.
UBS bought the private client services branch network of Piper Jaffray earlier this year for about $500 million to build up its wealth management business in the Midwest and western U.S. states.
KeyCorp will continue to offer investment services through its retail banking KeyCenter offices.
The sale to UBS involves only the McDonald Investments' branch network. Its former institutional businesses remain part of KeyBanc Capital Markets. Those businesses include investment banking, debt and equity capital markets, public finance and research. KeyCorp has assets of approximately $95 billion.
Shares of UBS fell 0.1 percent to 71.25 Swiss francs ($57.83) in Zurich trading. KeyCorp shares fell 10 cents to $36.65 in morning trading on the New York Stock Exchange.
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