Three-Way Merger To Create Swiss Financial Services Giant

by Phillip Morton, Investors Offshore.com

21 May 2007

The boards of directors of the Swiss exchange SWX Group, Swiss financial services firm SIS Group and card payment processor Telekurs Group have signed a letter of intent to merge the three organisations, it emerged last week.

Within the framework of the contemplated merger, the business activities of all three companies are to be combined under one roof. Subject to approval by the owners and responsible authorities, the transaction is expected to take effect in early 2008.

Through this leveraging of strengths, the three organisations said that they wish to ensure that optimal services are provided to the Swiss financial centre on a sustainable basis.

The companies said that combining the activities of SWX, SIS and Telekurs will strengthen Switzerland’s financial market infrastructure as well as heighten efficiency and innovativeness across the entire value chain, while an integrated financial market infrastructure, combined with a streamlined governance structure, concentrated capital clout and increased innovative strength, will have a positive impact on the international competitiveness of the Swiss financial centre.

The group also said that the unified enterprise will foster close collaboration with international partners and continue to offer open multi-provider architecture that enables unhindered access to securities trading, clearing and settlement.

Intensified international competition among financial centres, increasing demands placed on technical infrastructure, rapidly changing customer needs, as well as the growing complexity of regulatory requirements are all considerations that led the boards of the three companies to reassess the critical success factors for a future-oriented financial market infrastructure.

It is planned that the new board of directors will be constituted under the aegis of chairman-designate Prof. Dr. Peter Gomez, who at present is Chairman of the Board of the SWX Group.

In the coming months, the structure of the new organisation will be developed and an action plan drawn up for implementation.

Prof. Gomez commented: “With this contemplated merger, we will be strengthening the Swiss financial centre by offering integrated infrastructure that spans the entire value chain. Moreover, the open multi-provider architecture affords us unhindered access to all possibilities for international collaboration."

Romeo Lacher, Chairman of the Board, SIS Group, added: “The SIS Group has been confronting the torrid pace of change in the international securities business for quite some time now. The merger with both partner organisations will help us on our chosen path to become even better and more efficient, as well as to realise joint projects more rapidly.”

Stephan Zimmermann, Chairman of the Board, Telekurs Group, stated: “The Telekurs Group has been working very closely with SWX and SIS already for years. Through this planned leveraging of strengths, the new company will be even more internationally anchored and thus able to position itself as a world leader also in the years ahead.”

The SIS Group consists of four subsidiaries based in Zurich and Olten, including SIS SegaInterSettle AG, SIS x-clear AG, SAG SIS Aktienregister AG and SIS Systems AG. The group provides international securities trading, clearing, settlement and custody.

The Telekurs Group, which includes Telekurs Multipay, Telekurs Card Solutions, Swiss Interbank Clearing, Telekurs PayNet, Telekurs Financial and Telekurs Services, is active in the areas of card-based payment transactions, electronic payment systems and international financial information.

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