By John Reville
ZURICH (RockedBuzz via Reuters) – UBS expects to complete its acquisition of Credit Suisse “as early as June 12,” which will create a giant Swiss bank with a $1.6 trillion balance sheet following a government-backed bailout earlier this month. this year.
Completion of the deal is subject to the filing statement, which covers the shares to be delivered, declared effective by the U.S. Securities and Exchange Commission, and other remaining closing conditions, UBS said in a statement Monday.
“UBS expects to complete the acquisition of Credit Suisse as early as June 12, 2023. At that point, Credit Suisse Group AG will be merged into UBS Group AG,” it said.
UBS shares were indicated up 1.1% in pre-market activity in Switzerland, while Credit Suisse shares rose 0.7%.
“We believe the completion of the acquisition is an important step in starting what we consider a long process of integration and getting things done,” said Zuercher Kantonalbank analyst Michael Klien.
“While UBS’s risk profile has changed significantly, we see good opportunities for investors,” he added.
Switzerland no. 1 agreed on March 19 to pay 3 billion Swiss francs ($3.37 billion) and assume up to 5 billion francs in losses for its smaller Swiss rival after a collapse in customer confidence led it on the verge of collapse, prompting Swiss authorities to take action to avoid a broader banking crisis.
The bank had aimed to finalize the biggest banking deal since the global financial crisis by late May or early June. However, last month it said it remained in talks with Swiss authorities over loss protection and capital requirements, suggesting they needed time to be resolved.
Upon termination, Credit Suisse shares and American Depositary Shares (ADS) will be delisted from the SIX Swiss Exchange (SIX) and the New York Stock Exchange (NYSE), with the addition of UBS. SIX said in a separate statement that Credit Suisse shares would be delisted on June 13 at the earliest.
Under the full buyout, Credit Suisse shareholders will receive one UBS share for every 22.48 shares held.
The deal will create a group that will oversee $5 trillion in assets, giving UBS overnight leadership positions in key markets it would otherwise need years to grow in size and reach.
The mega-bank will employ 120,000 people worldwide, although it has already announced it will cut jobs to exploit synergies and reduce costs.
UBS rushed to close the transaction in record time, hoping to provide more certainty to Credit Suisse clients and employees and avoid departures.
The deal was underpinned by CHF200 billion in liquidity support from the Swiss central bank, as well as a government pledge to swallow up to CHF9 billion in losses beyond those borne by UBS.
“We also need to be clear … this is an acquisition, not a merger,” UBS CEO Sergio Ermotti said at a finance conference on Friday, warning of “painful” decisions to come.
Switzerland’s largest lender is considering delaying its quarterly results until the end of August to deal with complexities arising from the acquisition, the Financial Times reported on Sunday.
The bank declined to comment on the potential delay.
A question mark remains over what UBS will do with Credit Suisse’s Swiss retail bank, long considered the group’s “crown jewel”.
Bringing it into the UBS fold could yield significant savings, but concerns have been raised about the size of the combined entity and job cuts.
The bank was still analyzing the situation, Ermotti said on Friday, although the “base case” remained a full integration with UBS and it would not be influenced by “nostalgia” in deciding how to proceed.
Ermotti, who was brought back to UBS to lead the takeover, was optimistic about the challenges ahead and dismissed fears that the new bank was too big for Switzerland.
“I am convinced that this will be a great story not only for our shareholders and employees, but also for our clients and for the financial services industry in Switzerland,” he said on Friday.
($1 = 0.8889 Swiss francs)
(Reporting by John Revill, additional reporting by Noele Illien Editing by Tomasz Janowski)