DEVELOPING: UBS to Buy Credit Suisse For… $3.2 Billion
Swiss regulators on Saturday raced to seal a deal before Credit Suisse collapsed amid fears of banking contagion.
UBS, Credit Suisse and Swiss bank regulators worked to reach a deal to prevent a collapse.
UBS agreed to buy Credit Suisse for $3.2 billion, the Financial Times reported.
NBC News reported:
UBS agreed to buy its embattled rival Credit Suisse for 3 billion Swiss francs ($3.2 billion) Sunday, with Swiss regulators playing a key part in the deal as governments looked to stem a contagion threatening the global banking system.
“With the takeover of Credit Suisse by UBS, a solution has been found to secure financial stability and protect the Swiss economy in this exceptional situation,” read a statement from the Swiss National Bank, which noted the central bank worked with the Swiss government and the Swiss Financial Market Supervisory Authority to bring about the combination of the country’s two largest banks.
The terms of the deal will see Credit Suisse shareholders receive 1 UBS share for every 22.48 Credit Suisse shares they hold.
“This acquisition is attractive for UBS shareholders but, let us be clear, as far as Credit Suisse is concerned, this is an emergency rescue. We have structured a transaction which will preserve the value left in the business while limiting our downside exposure,” said UBS Chairman Colm Kelleher in a statement.
The combined bank will have $5 trillion of invested assets, according to UBS.
Credit Suisse shares tumbled by as much as 30% to a new record low on Wednesday after Saudis pulled funding.
Trading in the Swiss banking giant’s stock was halted several times on Wednesday.
Saudi National Bank, which holds 9.88% of Credit Suisse said it is unable to purchase anymore shares because of regulations.
“We cannot because we would go above 10%. It’s a regulatory issue,” Saudi National Bank Chairman Ammar Al Khudairy told Reuters.
The US Treasury on Wednesday announced it is reviewing the US’s financial exposure to Credit Suisse as the Swiss banking giant’s stock plummeted.
The post DEVELOPING: UBS to Buy Credit Suisse For… $3.2 Billion appeared first on The Gateway Pundit.