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reinsuranceGuru: "Reuters: UBS to buy AIG's commodity index business
UPDATE 2-UBS agrees to buy commodity index from AIG | Industries | Financial Services & Real Estate | Reuters: 'ZURICH, Jan 19 (Reuters) - Swiss bank UBS AG (UBSN.VX) (UBS.N) has agreed to buy the commodity index of AIG (AIG.N), part of a planned overhaul of UBS' investment banking division that will see it boost its index portfolio but axe most of its global commodities business.

UBS said on Monday it will pay $15 million on closing and an additional $135 million over the following 18 months, based on future earnings at the purchased business.

'The closing is subject to a number of regulatory and other conditions. No assurances can be given that any such conditions will be satisfied,' UBS said, without disclosing more details.

UBS said the purchase, the first by the crisis-hit bank in this segment after a string of sales, would complement its own commodities index. The bank said on Friday it was selling the trading books of some commodities businesses to Barclays (BARC.L). [ID:nLG515941]

'We are downsizing the commodities business within the Fixed Income, Currencies and Commodities unit of our investment bank,' UBS spokeswoman Sabine Jaenecke said.

The commodities index business, however, 'is consumer-driven and aligned with our mandate to reprioritise our investment bank's business portfolio,' she added.

Jaenecke said UBS was acquiring the trading books and the IT platform of the AIG index, which is one of the world's leading commodities indexes.

The index business is part of the investment bank's equities unit, the unit that UBS uses to serve its customer base.

UBS, best-known for its core wealth management business, unveiled on Oct. 3 a major restructuring of its troubled investment bank, whose risky investments forced UBS to make $49 billion of writedowns. [ID:nL3249694]

The plan envisaged cutting another 2,000 jobs at the investment bank and exiting most commodities, including power and gas, agriculturals and base metals. The bank said at the time it would hold onto precious metals and index and exchange-traded commodities, which are integral to its wealth management operations. (Additional reporting by Sam Cage; Editing by David Cowell and Simon Jessop)'"