A Paine-Swiss merger; PaineWebber purchased by banking giant; will have no effect on local sites

PaineWebber, the fifth largest brokerage securities firm in the United States, which has offices in Weehawken, Jersey City and Secaucus, announced this week that it was being purchased by Swiss banking conglomerate UBS AG, for a staggering price of $15 billion in cash, stock options and debt consolidation. According to David Walker, a spokesman for PaineWebber, the sale should have no effect on PaineWebber’s major office in Weehawken, housed in Lincoln Harbor, which employs more than 3,700 people. “PaineWebber will continue to work as a subsidiary to UBS and work in the same fashion,” Walker said. “There will be little if any changes to PaineWebber’s operation. It will be business as usual in Weehawken, and we’re committed to Weehawken.” According to Webber, UBS AG, considered the third largest bank in Europe, was looking to expand into the United States and saw the opportunity to become involved with an established firm such as PaineWebber. “The purchase took place because of PaineWebber’s outstanding market position,” Walker said. “UBS saw this as a chance to purchase a free-standing organization and remain to keep business as usual. They wanted to participate in the United States market and saw the value of what PaineWebber has to offer. There is very little if any overlap of services, so we feel that this is a move that has enabled us to become stronger and larger, rather than a move of contraction. They want to operate PaineWebber the way it has been operating.” After news of the sale and merger broke Wednesday, the Wall Street Journal reported that the move was made to combine PaineWebber’s focus on the retail brokerage in the United States with the overseas commercial and investment holdings already owned by UBS. Pundits also reported that the move made practical sense because of both companies’ existing services on both sides of the Atlantic. Employees were notified of the sale and merger on Tuesday and were informed that they need not worry about losing their jobs, which is the case in many sale and merger deals. Generally, such deals lead to a cutback of the work force, but since there is very minimal overlap of services, it is expected that every PaineWebber employee will be able to keep his job. “It’s very different from when one bank merges with another bank,” Walker said. “In those cases, you have a lot of people doing the same job and the job cuts are done to cut costs. That’s not the case here. They will now work for a powerful global organization. And there will be opportunity for very interesting work.” Walker said that the organization would still be known as PaineWebber in the United States. “We’re still going to be PaineWebber,” Walker said. “There won’t be many changes.” Outside the PaineWebber complex in Lincoln Harbor, employees were very reluctant to comment because of a corporate ban that prohibits speaking to the media. But the ones who were able to speak anonymously seemed optimistic about the deal. “It’s been the talk of the office the last few days, but I don’t think anyone is worried that they’re going to lose their jobs,” said one employee, who lives in Weehawken. “We’re still trying to get all the details and what it means to us, but from what I understand, it could mean a financial windfall for all of us.” “I’m excited,” said another employee. “In this business, I believe bigger is better.” Walker wasn’t initially sure, but the merger could mean plenty for employees who own PaineWebber stock. UBS has paid $73.50 per share of PaineWebber stock, which Tuesday was valued at nearly $50 a share at the closing bell of the American Stock Exchange. Weehawken Mayor Richard Turner wasn’t overly concerned about the prospects for the township’s most prominent employer. “From all the financial reports I’ve read and saw on television, everyone seems to be very optimistic,” Turner said. “Both companies seem to compliment each other and they foresee very few changes. Some mergers have resulted in tremendous losses in the work force, but right now, that doesn’t seem to be the case with PaineWebber. You can never tell, so I guess we have to wait and see. The Weehawken plant seems to be fine and will go on regardless.” The UBS acquisition of PaineWebber will not go into effect until 2001. Shareholders from both companies will vote on the merger in the fall.


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