Global EditionASIA 中文双语Français
Home / World / Europe

Credit Suisse takeover likely to be completed by June 12

By JULIAN SHEA in London | China Daily | Updated: 2023-06-06 10:05
Share - WeChat
A logo is pictured on the Credit Suisse bank in Geneva, Switzerland, March 15, 2023. [Photo/Agencies]

Shares in Switzerland-based banking group UBS rose by 1.22 percent on Monday morning following the company's announcement that the long-running saga of its takeover of rival Credit Suisse could be completed as early as June 12.

In March this year, UBS agreed to pay 3 billion Swiss francs ($3.37 billion) for its smaller rival, and take on up to 5 billion francs in losses, following a sudden loss in consumer confidence which sparked a slump in the value of Credit Suisse, and fears of another global banking crisis.

UBS had hoped to finalize the deal by the end of last month, before the completion was delayed by technical discussions with the Swiss authorities, which now seem to have been concluded in a satisfactory manner.

"We consider the completion of the takeover to be an important step in initiating what we see as a protracted integration process and getting things done," business news network CNBC quoted Zuercher Kantonalbank analyst Michael Klien as saying.

'Good opportunities'

"Although the risk profile of UBS has changed significantly, we see good opportunities for investors."

Shares in Credit Suisse also rose by 1.89 percent at the news of the deal, which will see its shareholders receive one UBS share for every 22.48 shares they previously held in Credit Suisse.

Switzerland's central bank and government both provided financial support for the deal to save Credit Suisse, and the deal has gone through faster than usual to reassure customers and employees, although it is reported that the new megabank will look to reduce its global workforce of 120,000 people.

"We have to be also clear … this is an acquisition, not a merger," UBS CEO Sergio Ermotti told a financial conference on Friday, adding that there would still be "painful" decisions to be made in the coming months.

Ermotti first served as CEO of UBS until November 2020, only to be reappointed shortly after the purchase of Credit Suisse, specifically to complete the process.

He has warned that the deal will not come without a cost.

"We won't be able to create, short-term, job opportunities for everybody," he said, adding that the company would "need to take a serious look at the cost base of the standalone and combined organizations and create a sustainable outcome".

However, he also suggested that Credit Suisse's key staff would be able to play an important role in a brighter, unified future.

"When the dust settles down … the best thing for our clients and shareholders and our people is to have the best people in the jobs," he added.

The deal will give UBS Group AG access to markets and regions where Credit Suisse had an existing stronger presence, with the Bloomberg news agency reporting that it was particularly keen to retain investment bankers in Asia.

Most Viewed in 24 Hours
Copyright 1995 - . All rights reserved. The content (including but not limited to text, photo, multimedia information, etc) published in this site belongs to China Daily Information Co (CDIC). Without written authorization from CDIC, such content shall not be republished or used in any form. Note: Browsers with 1024*768 or higher resolution are suggested for this site.
License for publishing multimedia online 0108263

Registration Number: 130349