ZURICH (Bloomberg) -- UBS AG, the world’s biggest bank for the wealthy, agreed to buy Commerzbank AG’s French money management unit for 435 million euros ($620 million) to double funds it oversees in Europe’s third-largest economy.

The purchase of Caisse Centrale de Réescompte Group adds 17 billion euros of assets, according to a statement Wednesday from Zurich-based UBS, which oversaw almost 2 trillion euros worldwide at the end of June.
CCR is UBS’s first purchase under Marcel Rohner, who took over as chief executive officer from Peter Wuffli in July and later announced the bank’s first quarterly loss in almost five years after its investment bank wrote down more than $3.4 billion in assets. UBS bought Standard Chartered Plc.’s Indian mutual fund unit and control of Hana Financial Group Inc.’s Korean funds unit earlier this year to expand in asset management.
“While it’s a small purchase it sends an important signal,” said Javier Lodeiro, an analyst at Bank Sal Oppenheim in Zurich. “They are taking money and investing in their core business” of wealth and asset management, “which is where they’re better than anyone else.”
UBS shares slipped 55 centimes, or 0.9 percent, to 63.25 francs at 1:43 p.m. in Zurich. The stock has fallen 15 percent this year compared with a 10 percent decline by the 63-member Bloomberg Europe Banks and Financial Services Index. Commerzbank shed 38 cents, or 1.3 percent, to 28.97 euros in Frankfurt trading.
‘Excess capital’
The French company’s wealth management unit, CCR Chevrillon-Philippe, oversees about 800 million euros, said Sabine Woessner, a Zurich-based spokeswoman for UBS. CCR Actions, an asset manager specializing in equity funds, and CCR Gestion, a manager of fixed-income and alternative products, manage about 16.2 billion euros, she said.
“CCR provides us with a great platform in France,” said Gabriel Herrera, UBS’s head of asset management in Europe. France was one of the European markets in which UBS wasn’t “considered a top player locally” in asset management, he said.
UBS’s strategy for the unit is to pursue “organic growth” combined with acquisitions “where it makes sense,” Herrera said. He said the bank has gaps in markets outside the UK, Switzerland, Germany, and France.
The purchase price consists of 275 million euros for a 100 percent stake in CCR and about 160 million euros for “expected excess capital” of CCR at the time of closing, UBS said. CCR, which has about 190 employees, will be integrated into UBS’s French asset management and wealth management business.
‘Fair’ price
Commerzbank, Germany’s second-biggest bank, said the sale will lead to a capital gain of about 150 million euros. The lender has been scaling back its international operations after a global expansion in the 1990s, instead focusing on consumer banking and small and medium-sized companies in its home market.
“The deal fits Commerzbank’s strategy to exit European asset management and focus on Germany and the sales price seems fair,” said Andreas Weese, a Munich-based analyst at UniCredit SpA. “For UBS it’s just a small addition that’ll help strengthen the French business.”
In March, the German lender agreed to sell its UK Jupiter Fund division to TA Associates and the unit’s management for 740 million pounds ($1.5 billion). Jupiter has about 19.2 billion pounds in assets.
“Commerzbank has completed its stated goal of fully refocusing its asset management activities on its German subsidiary, Cominvest,” the bank said in an e-mail.
The deal is expected to close in the first quarter of 2008, subject to regulatory approvals, UBS said in the statement.