UBS Group and robo advisor Wealthfront have agreed to scrap their planned $1.4 billion merger, the companies said on Friday.
UBS announced the deal for Wealthfront in January as a way to tap into a pool of mass affluent and next-generation investors. The Swiss bank will instead be providing almost $70 million in financing for Wealthfront at the same $1.4 billion valuation.
“I am incredibly excited about Wealthfront’s path forward as an independent company,” Wealthfront Chief Executive David Fortunato said in an announcement.
A spokesman for UBS did not immediately return a request for additional comment. UBS Group Chief Executive Ralph Hamers on the company’s July earnings call said the deal was still on course.
“UBS remains committed to its growth plans in the US and will continue the build-out of its digital wealth management offering,” the company said in a separate statement late Friday about the abrupt halt of the deal.
The Swiss bank in July named Naureen Hassan, a veteran wealth executive who worked on digital advice at Charles Schwab Corp. and Morgan Stanley, to be president of UBS Americas, effective October 3.
“We have an ambitious plan for the US,” Hamers said at the time. “Not only for the digital proposition, but also to support the financial advisors as crucial, and Naureen brings that experience.”
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