UBS Proposes $1 Billion Acquisition of Credit Suisse

Switzerland’s largest banks, UBS and Credit Suisse, are on the cusp of a historic merger, with UBS offering to purchase Credit Suisse for up to $1 billion. Swiss authorities have indicated their willingness to amend the nation’s laws, enabling the bypass of a shareholder vote on the transaction in order to expedite the deal’s conclusion before Monday.

The all-share agreement, set to be signed as early as Sunday evening, would value Credit Suisse at a fraction of its Friday closing price, effectively eliminating the holdings of the bank’s shareholders, according to four individuals with direct knowledge of the matter.

On Sunday morning, UBS conveyed its offer, proposing to pay CHF 0.25 per share in the form of UBS stock, a stark contrast to Credit Suisse’s closing price of CHF 1.86 on Friday. UBS has also stipulated a material adverse change clause that nullifies the deal if its credit default spreads rise by 100 basis points or more, sources said.

As the situation continues to develop rapidly, there remains no certainty that the terms will remain unchanged or that a deal will be finalized, the sources emphasized.