The preeminent universal bank in Switzerland, UBS unveiled its plan to acquire its most formidable and tumbling competitor Credit Suisse for around $3.2 billion under an “emergency rescue”.
The acquisition deal is expected to form a business worth more than 5 trillion in total invested assets and sustainable value.
As per the earlier data source, UBS had proposed a plan to take over Sussie for more than $2 billion, though, a recent announcement from the banking goliath cleared the fog from the deal. It agreed to the settlement of $3 billion Swiss francs or $3.25 billion for the acquisition of Credit Suisse.
In order to settle the matter with the shareholders of Credit Suisse, UBS will provide 1 share in UBS for 22.48 shares in Credit Suissee, which reflects a merger consideration of CHF 3 billion for the total share in Credit Suisse.
Also, the acquisition deal will be subject to “customary closing conditions” and is expected to be accomplished by end of 2023 if everything goes according to plan.
To ensure a smooth merge of Credit Suisse into UBS, UBS will appoint key personnel after getting legal clearance.
In a blog post, Credit Suisse unveiled that the collaboration is also working on a restructuring plan without laying off the current employment of staff.
Moreover, on the enclosement of the deal, the Swiss National Bank has promised to provide $100 billion in liquidity to UBS. The discussion for acquisition is joined by the Swiss Federal Department of Finance, the Swiss Financial Market Supervisory Authority (FINMA), and the Swiss National Bank.
“This acquisition is attractive for UBS shareholders but, let us be clear, as far as Credit Suisse is concerned, this is an emergency rescue,” UBS Chairman Colm Kelleher said. “Acquiring Credit Suisse’s capabilities in wealth, asset management and Swiss universal banking will augment UBS’s strategy of growing its capital-light businesses.”
In the wake of turmoil in the banking sector, giant financial institutions are emerging as a saviour for failed ones. Recently, HSBC Holdings Plc announced that the HSBC UK Bank unit acquired Silicon Valley Bank UK Limited (SVB UK) for £1.
