Struggling Swiss banking giant Credit Suisse has reportedly agreed to be taken over by arch-rival UBS at a discount to Friday’s closing price after seeing a wave of customer deposits leave the bank.
will acquire Credit Suisse CS,
for more than $2 billion in an all-stock deal, the Financial Times reported, citing people with direct knowledge of the deal. Bloomberg News reported the same terms of the deal.
The 0.50 franc per share offered by UBS, in stock, compares to the CSGN of Credit Suisse,
closing price of 1.86 francs on Friday. The FT said UBS initially offered just 0.25 francs per share.
Separately, the Wall Street Journal reported that the Swiss National Bank had offered UBS about $100 billion in liquidity to absorb Credit Suisse. It comes after the SNB agreed last week to lend 50 billion francs to Credit Suisse.
The Federal Reserve worked with its Swiss counterpart on the deal, as both banks have major operations in the United States.
Credit Suisse’s downfall came just days after US banks SVB Financial and Signature Bank collapsed. While Credit Suisse, as well as Swiss authorities, have said they don’t have the same kind of problems, they have also seen clients leave. After high net worth clients withdrew around $100 billion from Credit Suisse in the fourth quarter, they started to see big outflows again last week, the FT reported.
Credit Suisse has lost money for five consecutive quarters