Switzerland’s two largest banking giants, Union Bank of Switzerland (UBS) and Credit Suisse, have agreed to a sweeping merger in a move that has been engineered by Swiss regulators. UBS will acquire Credit Suisse for the low price of three billion Swiss Francs, equivalent to about 3.2 billion US dollars – a whopping sixty percent discount from its value when the markets closed on Friday.
As such, shareholders in Credit Suisse will be largely left with nothing as their share values will be largely wiped out during the merger. In an official statement released at a news conference by Swiss Justice Minister Karin Keller-Sutter, she explained just how important this deal is for not only Switzerland’s financial structure but global finance as well. The decision to go ahead with the UBS deal was made rapidly before markets opened on Monday after Credit Suisse experienced its worst weekly decline since the start of the pandemic – an occurrence that added further woes to a bank already suffering from losses and scandals.
This takeover follows shortly after two major banks in the US suffered collapses: Silicon Valley Bank and Signature Bank. Overall, this merger represents yet another sign of upheaval across the international banking system due to recent events.
