UBS Group doubled its initial offer and agreed on March 19 to buy its rival Credit Suisse for around $2 billion in a historic deal for Switzerland’s two biggest banks, the Financial Times reported. informed of,
FT sources said UBS had previously put an offer of $1 billion on the table on March 18, but the deal was rejected by the Credit Suisse board. The $1 billion offer was a substantial discount to the bank’s market value of about $8 billion on March 17, According For data from Company Market Cap.
To close the deal, Swiss officials agreed to bypass a shareholder vote to change the country’s regulations and announce the deal over the weekend, before markets opened.
Also, as part of the deal, the Swiss National Bank (SNB) committed to provide more than $100 billion in liquidity lines to USB. According to the FT, the deal was heavily influenced by the SNB and the Swiss Financial Market Supervisory Authority (FINMA). United States and European regulators are said to have approved the deal, with coordinated statements to be issued later on Sunday.
UBS is acquiring Credit Suisse pic.twitter.com/XF8LEZFXlx
— David Gura (@davidgura) March 19, 2023
swiss officer Credit Suisse options considered In case the deal with UBS over the weekend fails, that includes full or partial nationalization of the bank as an emergency option.
Credit Suisse’s rescue plan will also cover losses to bondholders. The move prompted concerns from the European regulator that it would undermine investor confidence in Europe’s financial sector.
UBS and Credit Suisse have been in talks with regulators since March 15, with Credit Suisse’s largest shareholder, the Saudi National Bank, saying during an interview that it would not increase its investment in the Swiss bank because of the regulations. The comments raised concerns about the bank’s ability to profit, raising fears about potential shareholder financing.
Credit Suisse was founded in 1856 to finance the expansion of Swiss railroads. It was considered the second largest bank in the country.