UBS to Acquire Credit Suisse in $2 Billion All-Stock Deal to Prevent Bank Failure
In order to prevent the troubled Credit Suisse from failing, the Swiss government has brokered a deal for UBS to absorb the bank in a $2 billion all-stock transaction. According to the Financial Times, the two banks had limited interaction, and the Swiss government is working to amend rules requiring a six-week shareholder comment period. To sweeten the deal, Swiss authorities will also provide UBS with a $100 billion credit line.
Despite receiving a CHF 50 billion (approximately $54 billion) loan from the Swiss government, Credit Suisse has been unable to restore investor confidence and prevent a sharp decline in its share price. The bank has experienced a series of missteps over the past year, and the banking crisis triggered by the collapse of Silicon Valley Bank has only exacerbated its struggling stock price. Most recently, the company disclosed a “material weakness” in its accounting procedures, causing a delay in the release of its annual report and prompting inquiries from the U.S. Securities and Exchange Commission.