RE:Prepare for a whopping on Monday bagholders UBS Group has agreed to buy Credit Suisse Group in a deal that was made possible thanks to “substantial liquidity assistance” from the Swiss National Bank.
Under the terms of the merger agreement all shareholders of Credit Suisse will receive one share in UBS for 22.48 shares in Credit Suisse, putting the deal’s price at around 3 billion Swiss francs ($3.2 billion).
The Swiss government is providing 9 billion Swiss francs to backstop potential losses that UBS may take on in the deal, officials said on Sunday.
The finalization of the deal caps off a challenging weekend in which reports said that regulators were rushing to announce a deal for Credit Suisse (ticker: CS) by Sunday evening—before financial markets open on Monday in Asia. A merger of Switzerland’s two largest banks comes against a backdrop of industry turmoil.
“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,” UBS Chair Colm Kelleher said in a statement Sunday.