The bank UBS has again improved its offer for the purchase of Credit Suisse, and according to reports overseas, the deal was closed at a value of approximately 3.2 billion dollars for Credit Suisse.
Credit Suisse shareholders were denied a vote on the deal and will receive one UBS share for every 22.48 shares they own, which, as mentioned, reflects a value of $3.15 billion (£2.6 billion). In 2022, UBS earned $7.6 billion, while Credit Suisse lost $7.9 billion.
After the bank rejected the offer to be sold for only one billion dollars, UBS once again improved the offer.
To put it bluntly, just last Friday the bank traded at a value of 8.5 billion dollars. Credit Suisse’s stock plunges 72% at the opening of trading in Europe.
The Swiss National Bank said the deal was the best way to restore the confidence of the financial markets and manage risks to the economy. As part of the transaction, the Swiss National Bank will provide liquidity to the extent of $108 billion to UBS and to reduce risks for UBS will provide security against future loss in the asset portfolio as a result of the transaction beyond $5.4 billion up to an additional amount of $9.8 billion.
The merger comes amid concerns about the global banking system, with Credit Suisse the latest casualty of the crisis of confidence seen in two regional US banks and another bank that received emergency funding.
In a statement, the Swiss Central Bank said that “a solution has been found to ensure financial stability and protect the Swiss economy in this exceptional situation.”
Christine Lagarde, president of the European Central Bank (ECB), said she welcomed the Swiss authorities’ “quick action”. “They help restore orderly market conditions and ensure financial stability. The Eurozone banking sector is flexible, with strong capital and liquidity positions,” said Lagarde.
Her comments were echoed in the US when Treasury Secretary Janet Yellen and Fed Chairman Jerome Powell said the Swiss authorities’ announcement supports “financial stability. The capital and liquidity of the US banking system is strong, and the US financial system is resilient “.