UBS acquires Credit Suisse for CHF 0.76 per share or CHF 3B

UBS (UBS) said it plans to acquire Credit Suisse (CS). The combination is expected to create a business with more than $5 trillion in total invested assets and sustainable value opportunities, the bank said in a statement. The discussions were initiated jointly by the Swiss Federal Department of Finance, FINMA and the Swiss National Bank and the acquisition has their full support. Under the terms of the all-share transaction, Credit Suisse shareholders will receive 1 UBS share for every 22.48 Credit Suisse shares held, equivalent to CHF 0.76 per share for a total consideration of CHF 3B. UBS said it benefits from CHF 25B of downside protection from the transaction to support marks, purchase price adjustments and restructuring costs, and additional 50% downside protection on non-core assets. Both banks have unrestricted access to the Swiss National Bank existing facilities, through which they can obtain liquidity from the SNB in accordance with the guidelines on monetary policy instruments, it added. The combination of the two businesses is expected to generate annual run-rate of cost reductions of more than $8B by 2027. UBS anticipates that the transaction is earnings accretive by 2027 and says the bank remains capitalized well above its target of 13%. Colm Kelleher will be Chairman and Ralph Hamers will be group CEO of the combined entity. The transaction is not subject to shareholder approval. UBS has obtained pre-agreement from FINMA, Swiss National Bank, Swiss Federal Department of Finance and other core regulators on the timely approval of the transaction.