UBS to buy Credit Suisse in historic deal to end crisis: Report
NEW DELHI: In what is being described as the “merger of the century”, UBS Group on Sunday agreed to buy Credit Suisse Group for $2 billion in a historic, government-brokered deal.
The deal, aimed at containing a crisis of confidence that threatened to spread across global financial markets, came after a hectic day of negotiations between the two lenders.
The two largest banks in the wealthy Alpine nation famed for its banking prominence have been in negotiations throughout the weekend, with the government, the central bank and financial regulators all involved.
The Swiss bank is paying more than $2 billion for its rival, people with knowledge of the matter told Bloomberg.
According to reports, it will be an all share deal and priced at a fraction of Credit Suisse’s close on Friday, when the bank was valued at about 7.4 billion francs ($8 billion.) The people asked not to be identified because the deal isn’t public yet.
Credit Suisse’s share price has tumbled from 12.78 Swiss francs in February 2021 due to a string of scandals that it has been unable to shake off.
The Swiss National Bank has agreed to offer a $100 billion liquidity line to UBS as part of the deal, according to the Financial Times, which reported the agreement first.
Swiss authorities are poised to change the country’s laws to bypass a shareholder vote, the paper reported, citing people close to the matter.
Earlier, reports said that UBS had offered to pay up to $1 billion.
However, Credit Suisse believed that the offer is too low and would hurt shareholders and employees who have deferred stock.
Meanwhile, the SonntagsZeitung newspaper called it “the merger of the century”.
“The unthinkable becomes true: Credit Suisse is about to be taken over by UBS,” the weekly said.
(With inputs from agencies)
The deal, aimed at containing a crisis of confidence that threatened to spread across global financial markets, came after a hectic day of negotiations between the two lenders.
The two largest banks in the wealthy Alpine nation famed for its banking prominence have been in negotiations throughout the weekend, with the government, the central bank and financial regulators all involved.
The Swiss bank is paying more than $2 billion for its rival, people with knowledge of the matter told Bloomberg.
According to reports, it will be an all share deal and priced at a fraction of Credit Suisse’s close on Friday, when the bank was valued at about 7.4 billion francs ($8 billion.) The people asked not to be identified because the deal isn’t public yet.
Credit Suisse’s share price has tumbled from 12.78 Swiss francs in February 2021 due to a string of scandals that it has been unable to shake off.
The Swiss National Bank has agreed to offer a $100 billion liquidity line to UBS as part of the deal, according to the Financial Times, which reported the agreement first.
Swiss authorities are poised to change the country’s laws to bypass a shareholder vote, the paper reported, citing people close to the matter.
Earlier, reports said that UBS had offered to pay up to $1 billion.
However, Credit Suisse believed that the offer is too low and would hurt shareholders and employees who have deferred stock.
Meanwhile, the SonntagsZeitung newspaper called it “the merger of the century”.
“The unthinkable becomes true: Credit Suisse is about to be taken over by UBS,” the weekly said.
(With inputs from agencies)
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