On Monday, the Swiss international investment bank UBS announced that it would purchase Credit Suisse “as soon as June 12.” Following a government-backed rescue earlier this year, this takeover would result in a massive balance sheet of $1.6 trillion.
According to a statement from UBS obtained by Reuters, the acquisition of Credit Suisse might be finished as soon as June 12, 2023. At that point, Credit Suisse AG and UBS Group AG will be combined. The deal’s completion will result in the delisting of Credit Suisse shares and American Depositary Shares (ADS) from the SIX Swiss Exchange (SIX) and the New York Stock Exchange (NYSE), according to UBS, which is also the largest bank in Switzerland.
For every 22.48 shares of Credit Suisse they own, shareholders will receive one share of UBS. UBS added that the merged bank will be the “undisputed leader in Switzerland” in its statement. The combined company will be in charge of managing assets valued at almost $5 trillion once the merger is completed. As a result, UBS will hold the top spot in significant markets.
The Swiss central bank provided 200 billion francs in liquidity to support the UBS-Credit Suisse agreement, and the Swiss government agreed to absorb up to 9 billion francs in additional losses on top of those incurred by UBS. In an effort to provide Credit Suisse clients and staff with more stability and prevent departures, UBS has been rushing to finalize the acquisition in a record amount of time.
In March of this year, after Credit Suisse was on the verge of failure due to a decline in consumer confidence, UBS agreed to pay 3 billion Swiss francs, or $3.37 billion, and to take on up to 5 billion francs in losses for the bank. Additionally, Swiss authorities intervened to stop a far larger banking disaster.
Despite the news of job cuts, the combined bank will still employ some 1,20,000 employees globally. Sergio Ermotti, CEO of UBS, spoke on Friday of difficult decisions regarding layoffs following Credit Suisse’s acquisition.
As part of its strategy to bolster talent in markets where it does not have a strong presence, the largest bank in Switzerland is also trying to retain over 100 investment bankers from the Credit Suisse Group across Asia.
After the acquisition, UBS is in advanced talks to keep key Credit Suisse employees in markets like India, South Korea, Thailand, and Vietnam. China was not part of UBS’ retention strategy, according to a Reuters report.
