UBS, Switzerland's largest financial institution, has agreed to acquire Credit Suisse (CS), which is facing a liquidity crisis, for more than $2 billion (approximately 2.619 trillion KRW), the Financial Times (FT) reported on the 19th (local time).
According to the report, UBS's acquisition deal for CS is expected to be announced later that evening. The acquisition price was raised from the $1 billion reported earlier that morning by FT and other foreign media to over $2 billion. A source explained, "Since the CS board rejected the offer of 0.25 Swiss francs per share, UBS will have to pay more than 0.50 Swiss francs per share." However, this is still far below CS's market value based on the closing price of 1.86 Swiss francs per share on Friday, the 17th.
The Swiss National Bank has also agreed to provide UBS with a liquidity line worth $100 billion as part of the deal. Details regarding this support have not been disclosed. Previously, UBS had requested a provision to conduct the transaction free of charge if Credit Default Swap (CDS) spreads surged, but it is reported that UBS agreed to relax this clause. The Wall Street Journal (WSJ) also confirmed the $2 billion agreement and reported, "Discussions are ongoing. The details of the deal may still change."
Authorities plan to finalize the contract before the Asian financial markets open on Monday, the 20th, to prevent market turmoil. Swiss authorities are currently preparing measures to streamline UBS's acquisition process of CS and emergency plans related to antitrust reviews by competition authorities. The U.S. financial authorities, including the Federal Reserve (Fed), are also cooperating with Swiss authorities.
Earlier, Bloomberg reported that CS opposed UBS's acquisition offer of up to $1 billion, considering it too low. Additionally, in a separate article, it was reported that if the acquisition negotiations fail, the Swiss government is also considering fully or partially nationalizing CS.
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