UBS Group (UBS) has agreed to acquire Credit Suisse Group (New York Stock Exchange: CS) as part of a government-led deal that aims to contain the banking shock that has swept through global financial markets, according to a news report.
the biggest UBS (UBS) will pay more than $2 billion, all in stock, for the smaller Credit Suisse (CS). Bloomberg reported, citing people familiar with the matter. That’s a fraction of Credit Suisse’s market capitalization of ~7.4 billion francs ($8 billion) at the end of Friday. Over the past five yearsCS’s ADS fell 89% as the Swiss bank grapples with scandal after scandal.
The plan was drawn up quickly after the failures of Silicon Valley Bank and Signature Bank triggered a rout in Credit Suisse stocks and bonds. says Bloomberg. The Swiss National Bank’s pledge to provide sufficient liquidity to CS apparently did not allay investor fears about the bank’s prospects.
The United States has been in contact with its Swiss counterparts as both banks operate in the United States and are considered systemically important in Switzerland, Bloomberg reported earlier.
Authorities were eager to strike a deal before Asian markets opened.
Learn more about Credit Suisse (CS):
- Earlier, Credit Suisse (CS) reportedly opposed a $1 billion takeover bid from UBS (UBS).
- Credit Suisse shares surged on March 16 after the bank secured a $54 billion loan from the Swiss National Bank.
SA contributor IP Banking Research discusses the implications of a marriage between Credit Suisse and UBS.