UBS reached an agreement to buy Credit Suisse after increasing its offer to more than 2,000 million dollarsreported Financial Times and the agency Bloomberg.
After frantic negotiations, both media revealed that the all-share deal between the two largest Swiss banks will be signed Sunday evening and will be priced at a fraction of Credit Suisse’s Friday closing price.
So, UBS will pay more than 0.50 Swiss francs per share, up from 0.25 it had offered this morning, but well below Credit Suisse’s closing price of 1.86 Swiss francs on Friday.
Also, the Swiss National Bank has agreed to offer a $100 billion liquidity facility to Credit Suisse as part of the deal, according to two people familiar with the matter.
Credit Suisse’s fall shocked 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 the authorities, UBS, the main Swiss bank, must finish this Sunday the purchase of his rival, Credit Suisse, to avoid a debacle and a contagious wave of panic in the stock markets on Monday but the trading is not over yet.
To speed up the acquisition, the government even pledged to take emergency measures and plans to introduce legislation that will bypass the normal six-week consultation period required for UBS shareholders, so that the deal can be closed immediately.
Credit Suisse is one of the 30 largest banks in the world, and its spectacular stock market crash this week sent jitters through the financial world. who fears a contagion effect after the collapse of entities in USA.
Such a merger is a complex affair that would typically take months to complete.but under pressure from the authorities, UBS will have to close the deal in a few days.
“The merger of the century”
The Swiss market opens on Monday at 0800 GMT and the merger is expected to have crystallized by then.
According to the agency Bloomberg, UBS requires public authorities to pay legal costs and potential losses that can amount to billions of Swiss francs.
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