UBS Plans To Seal Credit Suisse Takeover Deal As Early As June 12

UBS is planning to complete its takeover deal for Credit Suisse as early as June 12. The closure of this takeover deal will see UBS emerge as the largest Swiss bank, with a balance sheet of $1.6 trillion. UBS’s takeover deal for Credit Suisse was brokered by the Swiss government earlier this year as Credit Suisse sunk into more financial woes.

UBS to seal Credit Suisse takeover deal as early as June 12

The closure of this takeover deal is dependent on the registration statement being deemed as effective by the US Securities and Exchange Commission (SEC). There are also other decisions that need to be met for the deal to be closed.

The UBS stock has gained by 1.8% today, while Credit Suisse shares are up by 2.16%. The shares have made a commendable gain amid the news of this takeover deal that will see UBS emerging as a global banking giant.

While speaking to Reuters, Michael Klien, an analyst at Zuercher Kantonalbank, said, “We consider the completion of the takeover to be an important step in initiating what we see as a protracted integration process and getting things done.” Klien also noted that the risk profile for UBS had changed, and there was currently a good opportunity for investors.

Credit Suisse was once the largest bank in Switzerland before its demise. On March 19, the troubled lender agreed to be acquired by UBS for 3 billion Swiss francs. UBS also assumed 5 billion francs worth of losses. The collapse of Credit Suisse was attributed to declining confidence from customers, which triggered massive deposit outflows.

Given the large size of Credit Suisse, the Swiss authorities were forced to step in and broker a deal with UBS to prevent a broader crisis across the banking industry. UBS had earlier anticipated that the takeover deal would be closed in late May or early June.

Last month, UBS said that it was in talks with Swiss authorities regarding loss protections and capital requirements. The institution also said that these requirements needed time to be ironed out before the deal could be fully closed.

Changes at UBS following Credit Suisse takeover

After this takeover deal has been completed, Credit Suisse shares and American Depositary Shares (ADS) will be delisted from the SIX Swiss Exchange and the New York Stock Exchange. Credit Suisse shares will also be delisted on June 13 if the takeover deal is closed by June 12.

This deal will also create a group that will be in charge of $5 trillion worth of assets. Once this deal is closed, Credit Suisse will instantly have a leading position in strategic markets that would otherwise require many years to grow in size and achieve a broader reach.

UBS will also employ 120,000 people globally, but it has also said that it will trim jobs to lower costs and leverage synergies. The bank is also considering a delay in releasing its quarterly results until late August as it addresses the complexities of this takeover.