UBS Group doubled down on its initial offer and agreed to buy competitor Credit Suisse for nearly $2 billion on March 19.in a landmark deal for Switzerland’s two largest banks, the Financial Times reported.
UBS had previously tabled a $1 billion offer on March 18, but the deal was rejected by Credit Suisse’s board., according to FT sources. The $1 billion offer was a significant discount to the bank’s market value on March 17, which was nearly $8 billion, according to Companies Market Cap data.
To close the trade, Swiss authorities also agreed to change the country’s regulations to avoid shareholder voting and announce the deal over the weekendbefore the opening of the markets.
Besides, As part of the deal, the Swiss National Bank (SNB) has committed to providing over $100 billion of liquidity online to USB. According to the FT, the SNB and the Swiss Financial Markets Supervisory Authority (FINMA) have had a lot to do with the deal. US and European regulators are said to have approved the deal, with coordinated statements to be released later on Sunday..
UBS is taking over Credit Suisse pic.twitter.com/XF8LEZFXlx
— David Gura (@davidgura) March 19, 2023
UBS has acquired Credit Suisse.
Swiss authorities considered alternatives for Credit Suisse should the UBS deal fall through over the weekend, including a full or partial nationalization of the bank as an emergency option.
Credit Suisse’s bailout plan would also include losses for bondholders. The measure gave rise to concern of European regulators, who feared it would undermine investor confidence in the European financial sector.
UBS and Credit Suisse have been locked in talks with regulators since March 15, after Credit Suisse’s largest shareholder, the Saudi National Bank, said in an interview that it would not increase its investment in the Swiss bank due to regulations.. The comments raised concerns about the bank’s ability to turn a profit, raising fears about potential shareholder financing.
Credit Suisse was founded in 1856 to finance the expansion of the Swiss railways. It was considered the second largest bank in the country.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Keep reading:
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.