2005 Annual Report Julius Baer Holding Ltd. - GAM Holding AG

Notes
32 Acquisitions and sales
Acquisitions
On 2 December 2005, Julius Baer Holding Ltd. successfully completed acquisition of 100% of the three private banks Ehinger &
Armand von Ernst, Ferrier Lullin and BDL Banco di Lugano as well as of the asset manager GAM from UBS AG. UBS AG received
the total purchase price of approximately CHF 6.01 billion in the form of a 21.5% stake in the share capital of the post-acquisition
Julius Baer Group (value: CHF 2.21 billion) as well as CHF 3.80 billion in cash. For this purpose, the Board of Directors created
20 997 271 registered shares from authorized share capital, all of which are entitled to dividends for the 2005 financial year. These
shares, together with 3 002 800 treasury shares, were transferred to UBS AG as part of the purchase price.
At the time of acquisition, the assets under management at the three private banks came to CHF 57.3 billion (Ehinger & Armand
von Ernst CHF 23.2 billion, Ferrier Lullin CHF 18.4 billion and BDL Banco di Lugano CHF 15.7 billion) and those at asset manager
GAM amounted to CHF 70.9 billion. The three private banks are being integrated into the Private Banking division, whereas GAM,
Julius Baer Asset Management and the Trading & Sales area jointly form the Asset Management division as of 1 January 2006.
The assets and liabilities of the acquired entities were recorded as follows:
128 JULIUS BAER GROUP
Step-up
Book value to fair value Fair value
CHF 1000 CHF 1000 CHF 1000
Assets
Financial investments 672424 -173 672251
Property and equipment 180347 -11659 168688
Goodwill 359137 2570408 2929545
Intangible assets 10222 2020000 2030222
Deferred tax assets 16154 13457 29611
All other assets 8174121 33306 8207427
Total 9412405 4625339 14037744
Liabilities and equity
Deferred tax liabilities 29773 5269 35042
Provisions 13397 -16500 -3103
All other liabilities 8118777 46144 8164921
Total liabilities 8161947 34913 8196860
Equity 1250458 4590426 5840884
Total 9412405 4625339 14037744
The intangible assets recognized here consist of CHF 1.75 billion for the existing client relationships of these entities and CHF 273
million for the GAM brand. The client relationships are amortized over a useful life of ten years.
Net profit as of 31 December 2005 contains CHF 2.1 million from the three private banks Ehinger & Armand von Ernst, Ferrier
Lullin and BDL Banco di Lugano as well as from the asset manager GAM.