UBS reaches agreement to buy Credit Suisse after upping offer
UBS is taking over Credit Suisse even after Credit Suisse received a $54 billion financial lifeline from the Swiss National Bank to bolster its liquidity last week.
UBS said it will pay $3.2 billion for the 167-year-old flagship while the government said UBS would also take on the first $5.4 billion in losses from unwinding derivatives and other risky assets.
‘’Credit Suisse was on life support and Swiss authorities believed only a full transplant of the banks divisions into UBS would restore stability to the banking system," said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
Swiss authorities began urging UBS to purchase Credit Suisse after the investment bank’s loan failed to reassure investors and customers.
The deal involves risk for UBS.
"It will not only have to accept the healthier parts of the business but its failing ones as well – particularly its investment division, which has been mired in crisis after crisis. UBS will now be looking to chop up and sell off big chunks of operations, to slim down in size, given that the combined balance sheet is twice the size of Switzerland’s economy," Streeter said.
https://www.foxbusiness.com/economy/ubs-reaches-agreement-to-buy-credit-suisse-after-upping-offer.amp