The government-brokered deal aims to prevent turmoil at Credit Suisse—worsened by two massive U.S. bank failures last week—from spiraling into a larger banking crisis.
Topline
UBS Group AG has struck a deal to buy Credit Suisse—a rival Swiss bank rocked by financial turmoil—for over $3 billion, the two banks announced Sunday, as bank executives and Swiss officials sprint to contain a crisis sparked in part by the collapse of two major U.S. banks last week.Key Facts
UBS ultimately agreed to pay $3.2 billion (or 3 billion Swiss Francs) in an all-share deal, with Credit Suisse investors receiving one UBS share for every 22.48 Credit Suisse shares held, up from a $1 billion initial offer that Credit Suisse reportedly viewed as too low.
The deal represents a large discount compared to Credit Suisse’s market capitalization just two days ago: UBS says the acquisition will cost the equivalent of $0.82 (or 0.76 Swiss Francs) per share, compared to Credit Suisse’s $2.01 share price when markets closed Friday.
The combined company will have over $5 trillion in total invested assets, and UBS expects to make $8 billion in cost cuts over the next four years, UBS said in a statement late Sunday.
