December 7, 2023

Switzerland Legislators Formulating Emergency Measures For UBS Acquisition of Credit Suisse

A report from the Switzerland financial watchdogs in collaboration with the Swiss National Bank (SNB) revealed that the impending acquisition of Credit Suisse by UBS will safeguard the suitability of the banking sector. A March 18 report from three people privy to the matter revealed that the Swiss regulators are developing emergency measures to expedite the merger and acquisition (M&A) process.

According to the report, the team expected the M&A to be completed over the weekend before March 20.

Scope of the Emergency Measures

The March 18 report revealed that the regulators had prioritized to developed emergency measures to enable UBS to close the M&A deal without the shareholders’ vote. Initially, the acquisition process compelled the regulators to undergo an extensive consultation period with the key stakeholders including the customers, suppliers, investors and employees.

The consultation process will last for six weeks. On March 18, the SNB engaged the Switzerland Financial Market Supervisory Authority (FINMA) to develop a suitable regulatory framework.

The SNB and FINMA had argued that the acquisition would sustain Credit Suisse’s operation in a crowded financial market. Elsewhere two people privy to the UBS matter argued that after the acquisition of Credit Suisse, UBS intends to downsize its investment unit.

The UBS team had stated that the acquisition would increase the workforce by a third.

Mergers and Acquisition Requirements

A valuation report from the UBS team revealed that the company is valued at $1.1 trillion, whereas Credit Suisse’s total assets amounted to $575 billion. This implies that after the closure of the M&A, the two banks will rank amongst the best financial providers in the European bloc.

Before this, an American-based investment company BlackRock lost interest in acquiring Credit Suisse, inspiring UBS to make bold moves.

On March 15, SNB and FINMA stated that the products and services offered by the two financial providers meet the global capital and liquidity standards. The report revealed that SNB plans to support Credit Suisse’s liquidity capabilities after the acquisition.

The Credit Suisse team argued that the ongoing market uncertainty in the financial sector adversely affected the performance of its investment and financial sector.

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