ZURICH (Reuters) – UBS (UBSG.S) said on Monday that its takeover of Credit Suisse (CSGN.S) would close “as early as June 12”, creating a Swiss giant with a $1.60 balance sheet. A bank is on the horizon, he said. It has reached trillions of dollars since the government-backed rescue earlier this year.
Closing is contingent upon a registration statement covering the shares to be delivered being declared effective by the Securities and Exchange Commission and other remaining closing conditions, it added.
“UBS expects to complete the acquisition of Credit Suisse on June 12, 2023 at the earliest, at which time Credit Suisse Group AG will be merged into UBS Group AG,” UBS said in a statement.
Switzerland’s No. 1 bank was on the verge of bankruptcy on March 19 due to declining customer confidence, prompting Swiss authorities to take action, prompting a smaller Swiss rival to pay CHF 3 billion ( approximately $3.37 billion) and agreed to cover losses of up to CHF5 billion. To avoid a wider banking crisis.
Upon completion, Credit Suisse shares and American Depositary Shares (ADS) will be delisted from the Swiss Stock Exchange (SIX) and the New York Stock Exchange (NYSE), UBS added. In a separate statement, SIX said Credit Suisse shares would be delisted as early as June 13.
Credit Suisse shareholders will receive one UBS share for every 22.48 shares they own.
Largest banking transaction since the global financial crisis creates a group managing $5 trillion in assets, with UBS leading in key markets it would otherwise take years to scale and reach You’ll get your status overnight.
The megabank, which plans to employ 120,000 people globally, has already announced that it will cut jobs to take advantage of synergies and cut costs.
UBS wanted to provide more certainty to Credit Suisse customers and employees and reduce turnover, and rushed to complete the transaction in record time.
The deal was backed by CHF200 billion of liquidity support from the Swiss Central Bank and a government commitment to cover losses of up to CHF9 billion on top of those incurred by UBS.
“We also need to be clear on this, this is an acquisition, not a merger,” UBS Chief Executive Sergio Ermotti said at a financial conference on Friday, adding that the future “painful” costs and headcount Warned about cuts.
Question marks remain about how Swiss retail banks Credit Suisse and UBS, long regarded as the group’s “top jewels”, will respond.
Bringing it under the umbrella of UBS and consolidating the two banks’ largely overlapping networks could result in significant cost savings.
But there was also public pressure to keep Credit Suisse’s domestic operations as a separate entity with its own brand, identity and significant workforce.
Ermotti said on Friday that the bank was still analyzing the situation, but that the “baseline” was still a full integration with UBS and not let “nostalgia” sway him in deciding how to proceed. .
The executive, who was returned to UBS to lead the acquisition, dismissed concerns that the new bank would be too big for Switzerland, saying size was important for banks, but smaller banks could also pose problems. .
Overall, Ermotti was optimistic about the challenges ahead.
“We are confident that this will be a great story not only for our shareholders and employees, but also for our customers and the Swiss financial services industry,” he said on Friday.
(1 dollar = 0.8889 Swiss franc)
Reporting by John Revill and Noele Illien Editing by Tomasz Janowski
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