UBS and Credit SuisseGetty workplaces
The Swiss firm UBS Group AG has agreed to buy Credit Suisse in change for two,000 million {dollars} (about 1,900 million euros) in personal shares, in accordance with The Financial Times and Bloomberg.
To consummate the operation, the nation’s authorities are getting ready a legislative change that makes the transaction efficient earlier than the opening of the buying and selling week, on Monday. Swiss rules require a six-week interval to seek the advice of shareholders about an acquisition.
The settlement consists of an injection of liquidity from the Swiss National Bank for 100,000 million {dollars} and comes after a weekend of intense negotiations between the boards of Directors of each banks, with the endorsement of the Swiss National Bank and the Swiss Supervisory Authority. .
UBS can pay virtually 1 / 4 of the 1.86 francs it was price on the Credit Suisse Stock Exchange this Friday: about 0.50 francs per share.
Although the 2 banks are comparable in measurement, their inventory market worth may be very completely different. While UBS is valued at 56,000 million {dollars}, its competitor doesn’t attain 8,000 million.
Among the obstacles of the negotiation can be UBS’s request for public ensures for five,500 million and a potential adjustment of 10,000 jobs as soon as the merger is accomplished.
Credit Suisse had 16,700 staff in Switzerland on the finish of 2022 and round 50,500 worldwide.
Crisis of a century-old financial institution
The merger with UBS would finish a troubled chapter at Credit Suisse, based in 1856 by Alfred Escher. The entity has requested public support of fifty,000 million Swiss francs (an analogous quantity in euros) from the Swiss National Bank to “preemptively strengthen its liquidity.”
The financial institution skilled its blackest buying and selling day this Wednesday when it misplaced 1 / 4 of its worth on the inventory market and dropped its shares to a traditionally low degree, under 2 Swiss francs, one thing by no means seen in its 167-year historical past, a collapse that it dragged down different European banking values.