UBS to Acquire Credit Suisse in a Deal Mediated by Swiss Government

UBS to Acquire Credit Suisse in a Deal Mediated by Swiss Government

According to reports, under the mediation of the Swiss government, UBS agreed to acquire rival Credit Suisse for 3 billion Swiss francs and agreed to bear losses of up to $5.4 billion. UBS said that the 22.48 shares held by its shareholders would be exchanged for one UBS share, equivalent to 0.76 Swiss francs per share, for a total consideration of 3 billion Swiss francs. The transaction is expected to be completed by the end of 2023, with annual cost savings of approximately $7 billion by 2027. The Swiss Central Bank said it would provide liquidity assistance of 100 billion Swiss francs ($108 billion) to the merged banks. The Swiss Financial Market Supervisory Authority (FINMA) stated that all business activities of the two banks would likely continue without restriction or interruption. With the support of the Swiss government, Credit Suisse’s additional Tier 1 capital bond (AT1) with a nominal value of approximately 16 billion Swiss francs ($17.2 billion) will be fully written down.

Official announcement: UBS acquires Credit Suisse for 3 billion Swiss francs

Analysis based on this information:


In a significant development in the global banking industry, UBS has agreed to acquire rival Credit Suisse for 3 billion Swiss francs, with the deal mediated by the Swiss government. Under the terms of the merger, UBS would bear losses of up to $5.4 billion, and the 22.48 shares held by its shareholders will be exchanged for one UBS share, which is equivalent to 0.76 Swiss francs. The transaction is expected to be completed by the end of 2023, with annual cost savings of approximately $7 billion by 2027.

One of the key highlights of the deal is the Swiss Central Bank’s pledge to provide liquidity assistance of 100 billion Swiss francs ($108 billion) to the merged banks. This is a significant move, as it reflects the government’s support for the Swiss banking industry and its commitment to ensuring its stability and growth even in times of crises. Such a substantial liquidity cushion will help reassure the global banking community and prevent any systemic risks during the merger process.

Another critical aspect of the transaction is the announcement by the Swiss Financial Market Supervisory Authority (FINMA) that all business activities of the two banks would likely continue without restriction or interruption. This is good news for both UBS and Credit Suisse customers, who can expect a smooth transition and continuity of services. It also indicates that FINMA is confident that the merger would not have any adverse impact on the banks’ operations or their ability to meet regulatory requirements.

However, the deal is not without its challenges, especially for Credit Suisse. With the support of the Swiss government, Credit Suisse’s additional Tier 1 capital bond (AT1) with a nominal value of approximately 16 billion Swiss francs ($17.2 billion) will be fully written down. This means that the bondholders would likely incur substantial losses. While such a move is intended to strengthen Credit Suisse’s capital base, it may also deter potential investors and have a long-term impact on the bank’s reputation.

In conclusion, the UBS-Credit Suisse merger is a significant development in the global banking industry, with far-reaching implications for shareholders, customers, and regulators. While the deal has several positives, including the Swiss government’s support, liquidity assistance, and continuity of services, it also poses challenges such as job losses, shareholder losses, and a potential reputational impact for Credit Suisse. The success of the merger would depend on how well UBS and Credit Suisse manage the integration process, navigate regulatory hurdles, and respond to changing market trends.

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