A proposed purchase transaction between Wealthfront and UBS, a major Swiss bank, has been halted. Wealthfront, which targets Millennials and Gen Z, was to be acquired by UBS Americas for $1.4 billion in an all-cash deal.
In order to appeal to “the next generation of investors,” the platform was planned to serve as the cornerstone of the bank’s digital-first wealth management offering and act as the driving force behind UBS’ entry into the US market.
The agreement to cancel the deal, which was announced in January and was scheduled to close in H2 2022, has finally been reached by both sides. Despite the change, UBS claims it is still committed to its ambition to expand into the US and will keep expanding its digital wealth management capabilities.
Wealthfront CEO David Fortunato noted the $69.7 million in funding UBS has invested in the business and stated that the two are “continuing to explore ways to work together.”
The purchase was intended to be a cornerstone of UBS CEO Ralph Hamers’ three-year digital transformation strategy, which included the elimination of almost 3,000 jobs in May 2017 as part of a $1 billion package of cost-cutting measures.
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