UBS Set to Finalize Credit Suisse Takeover, Potential Completion Date in Sight

Updated: 05 June 2023

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On Monday, UBS, the Swiss banking giant and crisis-hit domestic rival Credit Suisse, announced that they expect to finalize their merger by June 12.

UBS and Credit Suisse Merger Expected to Finalize by June 12

UBS CEO Sergio Ermotti had initially suggested a late May or early June completion, but they have slightly postponed the date. However, UBS remains on track with its acquisition plans. The Swiss government pressured UBS to rescue Credit Suisse from potential collapse, resulting in a three billion Swiss francs ($3.37 billion) deal on March 19.

Shares of Credit Suisse showed a 0.7% increase in pre-market trading following UBS’s announcement of the closing dates for the takeover.

Credit Suisse shares indicated 0.7% higher in premarket after UBS announces closing dates for takeover.

— CGTN Africa (@cgtnafrica) June 5, 2023

In an official statement, UBS confirmed it expects to complete the acquisition of Credit Suisse as early as June 12. At that time, UBS Group AG will merge with Credit Suisse Group AG. As part of the merger process, Credit Suisse shares and American Depositary Shares (ADS) will be delisted from the Swiss and New York Stock Exchange.

According to Ermotti, the acquisition will create a superbank under UBS’s control, responsible for managing $5 trillion in invested assets. The deal will significantly impact the Swiss banking landscape and potentially reshape the global financial industry.

UBS Announces Acquisition Plans and Potential Job Cuts in Mega-Bank Deal

Although the mega-bank will employ 120,000 people worldwide, it has already stated its desire to slash jobs in order to harness synergies and decrease costs. UBS had been hurrying to close the transaction in record time, hoping to provide greater certainty for Credit Suisse clients and employees to prevent departures.

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CEO of UBS Sergio Ermotti warned of painful decisions about job cuts following the takeover of Credit Suisse, Which he said he hoped would be formalised in coming days

“We won’t be able to create, short term, Job opportunities for everybody.

– Per Reuters pic.twitter.com/qohU4F7lHZ

— G-MAN (@GavinClimie) June 5, 2023

The Swiss central bank provided 200 billion francs in liquidity support for the deal. The government, on the other hand, made a commitment to absorb up to 9 billion francs in losses, in addition to those borne by UBS.

According to UBS CEO Sergio Ermotti, “We have to be clear…this is an acquisition, not a merger.” However, he warns that there would be painful decisions ahead.

According to the Financial Times, UBS, which is Switzerland’s largest lender, is contemplating delaying its quarterly results until the end of August because of complications arising from the takeover. However, the bank is yet to comment on the potential delay.

The fate of Credit Suisse’s Swiss retail bank, long regarded as the group’s “crown jewel,” remains uncertain. While bringing it under UBS’s control could cause significant savings, concerns have been raised concerning the size of the combined entity and potential job cuts.

Ermotti stated the bank was still analyzing the situation. However, the “base scenario” continued to be full integration with UBS, and “nostalgia” would not sway him when deciding how to proceed.

He expressed optimism about the challenges ahead and dismissed concerns that the new bank would be too large for Switzerland.

“I am convinced this is going to be a great story for both our shareholders, employees and our clients and for the financial services industry in Switzerland.”