Swiss bank UBS and automated investment services firm Wealthfront mutually agreed to terminate the $1.4 billion deal, under which the Palo Alto, California company was to be acquired by UBS Americas.
After both companies announced their decision, the Swiss bank said it is committed to its plan of growing in the U.S. and will continue to build its digital wealth management offering.
According to Bloomberg, UBS was looking to add more than $27 billion in assets under management and over 470,000 clients in the U.S. through the purchase. The decision was a surprise setback for UBS Group AG Chief Executive Officer Ralph Hamers in the bank’s quest to become more digital.
Hamers has said before that the bank must embrace a broader base, even if it means pushing lower-margin, automated products that aren’t the hallmark of UBS’s personalized offerings.
The deal, first announced earlier this year, was expected to close in the second half of the year. Neither side specified a reason for the decision.
“We are continuing to explore ways to work together in a partnership and UBS has given us $70 million in financing at a $1.4 billion valuation,” Wealthfront Chief Executive Officer David Fortunato said in a statement.
