Swiss banking giant UBS has agreed to bail out Credit Suisse in an emergency government-backed takeover.
report from financial times He said the acquisition was worth more than $2 billion.
The move comes in a desperate effort to prevent a possible collapse of Credit Suisse and avoid further global market uncertainty, Swiss officials said on Sunday. Reuters report.
BREAKING: UBS has agreed to acquire Credit Suisse in a historic government-brokered transaction aimed at containing the confidence crisis that threatens to spread across global financial markets.
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— Bloomberg (@business) March 19, 2023
According to Reuters, the Swiss central bank is injecting significant liquidity into the deal to support the merger, ensure financial stability and protect the Swiss economy.
Credit Suisse saw its share price fall sharply last week despite being hit with a $54 billion financial lifeline by the Swiss National Bank on Wednesday. (Related: ‘Critical weakness’: Credit Suisse shares plummet to record lows)
The deal was immediately criticized for a sudden legal change introduced by the government to avoid UBS’s shareholder vote on the decision. Vincent Kaufmann, CEO of Credit Suisse and his Ethos Foundation, which owns his 3-5% of UBS funds, told the FT the move was a result of his poor corporate governance.
“I can’t believe our members and UBS shareholders will be happy with this,” he said. “I have never seen such measures taken. It shows how bad the situation is.”
The merger follows the recent sudden collapse of American commercial bank SVB, which was placed under FDIC control on March 10.
