UBS drops plans to acquire StanChart unit in India

ZURICH: Swiss banking giant UBS said on Friday it had dropped plans to acquire a mutual fund management business in India from the British group Standard Chartered.

UBS, which has been hit hard by the subprime mortgage market meltdown in the United States, gave no reason for its decision. The deal would have cost it 92 million euros ($135 million).

"Following the expiry of the sale and purchase Agreement that they executed in January 2007, UBS and Standard Chartered Bank have decided not to continue negotiations regarding the acquisition by UBS of the Standard Chartered mutual funds management business in India," UBS said in a statement.

"A strategic alliance between UBS and Standard Chartered Bank for fund distribution in Asia, announced at the same time as the planned acquisition, was established in April 2007 and is unaffected."

The statement stressed that any costs incurred because of the cancellation of the deal would be "negligible" and would have no impact on UBS earnings.

UBS announced a net loss of 830 million Swiss francs for the third quarter after having to absorb asset write-downs totalling 9.3 billion euros because of its exposure to the US housing market crisis.

The bank could now end 2007 with a loss for the first time in its history.

UBS shares in early trading were showing a loss of 0.19 per cent at 52.5 Swiss francs on a generally weaker Swiss Market Index.