Switzerland’s two biggest banks, UBS and Credit Suisse, are set to merge in an all-share deal worth over $2 billion, according to reports by the Financial Times.

The deal is expected to be signed as early as Sunday evening and would allow Swiss authorities to bypass a shareholder vote, as they rush to finalize the transaction before Monday. The agreement is said to be priced at a fraction of Credit Suisse’s closing price on Friday, thereby wiping out most of its shareholders.

The merger is heavily influenced by the Swiss National Bank and regulator Finma, with limited contact between the two lenders, the report added. The US Federal Reserve has also given its assent to the deal progressing. Under the new agreement, UBS will pay more than SFr0.50 a share in its own stock, which is far below Credit Suisse’s closing price of SFr1.86 on Friday. UBS has also agreed to a softening of a material adverse change clause that would void the deal if its credit default spreads jump.

However, some have criticized the plans to void normal corporate governance rules by preventing a UBS shareholder vote. Vincent Kaufmann, the chief executive of Ethos Foundation, which represents Swiss pension funds that own between 3% and 5% of Credit Suisse and UBS, told the Financial Times that the move was poor corporate governance.

The SNB had earlier provided Credit Suisse with an emergency SFr50bn ($54bn) credit line when the bank’s share price fell and clients withdrew their money. Despite this, deposit outflows from Credit Suisse exceeded SFr10bn a day last week, while customers withdrew SFr111bn from the bank in the final three months of last year.

UBS is seeking concessions and protections from the government, especially from any pending legal cases and regulatory investigations into Credit Suisse that could result in fines or losses. The bank is also requesting permission to phase in any extra demands it would face under global rules on capital that govern the world’s largest banks.

The Swiss cabinet has assembled in the finance ministry in Bern for a series of presentations from government officials, the SNB, Finma, and representatives of the banking sector. The government is preparing emergency measures to fast-track the takeover and intends to introduce legislation that will bypass the normal six-week consultation period required for UBS shareholders so that the deal can be sealed immediately.

Justin Sun, the founder of Tron, has made a bid to acquire Credit Suisse for $1.5 billion and integrate it into the Web3.0 world, according to AZCoin News. Sun’s goal is to create a more innovative and decentralized financial system by leveraging the potential of blockchain technology and cryptocurrencies. Switzerland is known for being a crypto-friendly country, and Sun believes that integrating Credit Suisse into a crypto-friendly financial institution could help pave the way for this future.

#UBS #CreditSuisse #bank #azcoinnews #crypto2023

This article was republished from azcoinnews.com

Swiss authorities agreed to change the country's regulations to bypass the shareholder vote and announced the deal over the weekend.

UBS Group agreed to buy ailing rival Credit Suisse for $3.25 billion on March 19 as part of an "emergency order" to prevent instability in financial markets .

UBS has agreed to buy Credit Suisse for more than $2 billion, the Financial Times reported earlier, citing an insider. However, UBS's latest statement revealed that the total consideration for the deal is about 3 billion CHF, or $3.25 billion. That's still a significant bargain compared to Credit Suisse's March 17 market cap of 7.5 billion francs, or about $8 billion .

“This acquisition is attractive to UBS shareholders. But let's be clear about Credit Suisse. It is a "lifebouy". We have structured a transaction that preserves the remaining value in the business while limiting our negative exposure”

said Colm Kelleher, President of UBS.

To seal the deal, Swiss authorities agreed to amend the country's regulations to bypass a shareholder vote and announced the deal over the weekend before the market opened.

As part of the deal, the Swiss National Bank also committed to providing UBS with more than $100 billion in liquidity, according to reports.

The discussions were jointly initiated by the Swiss Federal Ministry of Finance, the Swiss Financial Market Supervisory Authority (FINMA) and the Swiss National Bank, and the acquisition is fully supported, UBS said in a statement.

UBS was not the only solution

Swiss authorities were considering alternatives to Credit Suisse in case the deal with UBS falls through over the weekend, including nationalizing the bank in whole or in part as an emergency solution.

Credit Suisse's rescue plan would also include losses for bondholders, raising concerns among European regulators. According to them, this would undermine investor confidence in the European financial sector.

UBS and Credit Suisse have been in talks with regulators since March 15, after Credit Suisse's largest shareholder, the National Bank of Saudi Arabia, said it would not increase its investment in the Swiss bank due to regulations . The comments added to concerns about the bank's ability to generate profits, sparking fears about a possible shareholder financing.

Credit Suisse was founded in 1856 to finance the expansion of the Swiss railways. It was considered the second largest bank in the country.

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#CreditSuisse #UBS #banks #bankingcrash #switzerland

Several sources on March 19 claim that UBS Group has agreed to pay $3.2 billion to acquire the troubled European bank Credit Suisse.

UBS Will Purchase Credit Suisse

The agreement was announced in the evening, based to news sources from the Associated Press. To avoid a financial disaster, the government mediated the agreement.

Over the course of the day, the deal's worth grew. For only $1 billion, UBS Group first offered to purchase Credit Suisse. #UBS Group later increased their offer, and even though Berset first withheld the deal's value, numerous sources put it at $2 billion.

8 o'clock p.m. The deal, based on the Associated Press and UTC, is worth $3.2 billion. In line with the most recent information, the Swiss National Bank will give UBS Group access to $162 billion in liquidity, an increase from the $54 billion previously indicated.

Prior to the sale, Credit Suisse faced distinct problems. A new set of problems emerged on March 14 after managers revealed "significant deficiencies" in the bank's financial reporting controls, despite the corporation having long-running scandals.

Credit Suisse stock (CHF) is currently valued at $1.86, a decrease of 32.85% over the past month as a result of worries surrounding the company.

The Crypto Proposal By Justin Sun

#JustinSun who is well-known for his leadership at Huobi and his previous position as CEO of TRON, made an earlier-in-the-day offer to purchase #CreditSuisse for $1.5 billion.

On March 19, Sun posted a series of tweets:

"I would like to propose my own offer of $1.5 billion to acquire Credit Suisse and integrate it into the Web3.0 world. Switzerland has been one of the most crypto-friendly countries in the world."

In his letter, Sun criticized UBS's initial offer as "falling short" and outlined his own ideas for integrating #Cryptocurrencies and #blockchain technologies with Credit Suisse. In terms of regulation, he pointed out that Switzerland is one of the world's most crypto-friendly nations.

It's unclear if Credit Suisse and the Swiss government gave Sun's proposal any thought.

Fortune claims that the nation believed nationalization to be the only viable alternative to the UBS agreement, indicating that Sun's offer was not given any thought.

#UBS #CreditSuisse #Fiat #Bank #crypto2023

UBS, Switzerland's largest bank, has agreed to acquire Credit Suisse, one of its largest rivals, for CHF 3,000 million (USD 3.23 billion). The announcement came after a weekend of intense negotiations between the two banks, the government, the central bank, and the regulatory authority. The Swiss Confederation President, Alain Berset, confirmed the deal and said in a press conference that it is the best way to "restore confidence."

The purchase will be made in UBS shares, at a price of only CHF 0.76 per Credit Suisse share, which is triple the amount offered earlier in the day but significantly below Credit Suisse's Friday closing price of CHF 1.86. The merger of the two banking giants, both of which are among the 30 key banks in the global financial system, is expected to be completed and announced in time for the opening of Asian markets.

UBS will benefit from a government guarantee of about CHF 9,000 million (USD 9.75 billion) as insurance if problems arise, said Finance Minister Karin Keller-Sutter. In addition, the central bank will provide a liquidity line of up to CHF 100,000 million (USD 108,000 million) to UBS and Credit Suisse.

The merger is seen as crucial not only for Switzerland but also for the stability of the entire global financial system. UBS, which took several years to recover from the 2008 financial crisis and a massive government bailout, is starting to reap the rewards of its efforts.

However, it required a lot of effort from the authorities before the bank's management agreed to take on the role of rescuing Credit Suisse. The Swiss banking union "demanded" the participation of social partners in the discussions, given the "enormity" of what is at stake in the acquisition, which could mean the massive loss of jobs.

Credit Suisse's collapse rocked the global financial system last week, as panicked investors dumped their stocks and bonds following the collapse of several smaller US lenders. Under pressure from regulators, UBS must complete its acquisition of its rival, Credit Suisse, by Sunday.