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UBS Proposes Acquisition of Credit Suisse for $1 Billion

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UBS Proposes Acquisition of Credit Suisse for $1 Billion

According to reports, according to the Financial Times, UBS has proposed to acquire Credit Suisse for up to $1 billion. The Swiss authorities are planning to amend the country’s laws to bypass shareholder votes on the deal, as they are eager to finalize the deal by Monday. Four people familiar with the matter said that an all stock transaction between Switzerland’s two largest banks would be signed as early as Sunday night, and the transaction price would be only a small portion of Credit Suisse’s closing price on Friday, which would almost cost Credit Suisse’s shareholders nothing. People familiar with the matter said that on Sunday morning, the two sides had a communication on the acquisition offer. UBS proposed to purchase the shares of Credit Suisse at a price of 0.25 Swiss francs per share, which was far lower than the closing price of 1.86 Swiss francs last Friday. People familiar with the matter added that UBS also insisted on setting significant adverse change clauses, which would invalidate the transaction if its credit default spread jumped by 100 basis points or more. Everyone emphasized that the situation is changing rapidly, and there can be no guarantee that the terms will remain unchanged or that an agreement can be reached. People familiar with the matter said that the current terms are unfair to Credit Suisse and its shareholders. The Swiss Central Bank, UBS, Credit Suisse and Finma all declined to comment.

UBS plans to acquire Credit Suisse for up to $1 billion

Analysis based on this information:


UBS has reportedly offered to acquire Credit Suisse for up to $1 billion, according to reports by the Financial Times. To finalize the deal, Swiss authorities may amend laws and bypass shareholder votes altogether, aiming to conclude the acquisition by Monday. The deal will be an all-stock transaction, and reports suggest that the terms could bring almost no cost to Credit Suisse’s shareholders.

UBS has offered to purchase Credit Suisse’s shares at 0.25 Swiss francs per share, significantly lower than Friday’s closing price of 1.86 Swiss francs. The transaction price will be determined only a small portion of Credit Suisse’s closing price, according to insiders. However, this proposal comes with significant adverse change clauses, which nullify the transaction if Credit Suisse’s credit default spread rises by 100 basis points.

Although sources claim that negotiations took place on Sunday morning between the banks, there can be no assurance that the terms will remain unchanged or that a final agreement will be reached. Insiders suggest that these current terms are unfair to Credit Suisse and its shareholders.

Both the Swiss Central Bank and regulators declined to comment on the matter. However, reports suggest that the authorities may amend laws to bypass shareholder votes, indicating that this acquisition is compelling enough to bypass usual checks and balances.

The proposed acquisition comes as a surprise to many since UBS and Credit Suisse are Switzerland’s two largest banks. Still, both banks have experienced considerable financial turmoil, prompting speculation of a merger. This proposed acquisition could result in a significant shake-up in the banking industry in Switzerland and the rest of the world.

In conclusion, UBS’s proposed acquisition of Credit Suisse is a developing story that might change rapidly. However, it is clear that UBS has offered a deal that could greatly benefit them while potentially affecting Credit Suisse and its shareholders negatively. If the transaction proceeds as reported, it could affect the Swiss banking landscape and raise questions about how acquisitions of this magnitude take place.

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