Credit Suisse and UBS entered into a merger agreement on Sunday under which UBS will be the continuing entity. Following the negotiations that took place over the weekend and led to the signing of the merger agreement, UBS and Credit Suisse have concluded that a merger is in the best interests of their shareholders and stakeholders. The Federal Department of Finance, the Swiss National Bank and FINMA had previously required the two companies to complete this transaction in order to restore the necessary confidence in the stability of the Swiss economy and the Swiss financial centre.
The merger is subject to the following material conditions:
- All Credit Suisse shareholders will receive 1 UBS share for 22.48 Credit Suisse shares in exchange for the merger. This exchange ratio corresponds to an acquisition price of CHF 3 billion for all Credit Suisse shares.
- The merger is subject to customary closing conditions. Both parties are confident that all conditions can be fulfilled. The merger is expected to be completed, if possible, by the end of 2023.
- The Swiss National Bank will provide Credit Suisse with access to facilities through which it will receive substantial additional liquidity.
- It is expected that, in order to ensure a smooth integration of Credit Suisse into UBS, UBS will appoint employees to key positions at Credit Suisse as soon as legally possible.
- Credit Suisse will continue its business as usual and implement its restructuring measures in cooperation with UBS.
- UBS has expressed confidence that Credit Suisse employees can continue to be employed.
Credit Suisse was informed on Sunday by FINMA of its decision that Credit Suisse’s Additional Tier 1 capital (arising from the issuance of Tier 1 capital notes) in the aggregate principal amount of approximately CHF 16 billion will be written down to zero.
Taking into account the special circumstances affecting the Swiss economy as a whole, the Federal Council issues an emergency ordinance tailored to this specific transaction. It should be noted that the merger is being carried out without the otherwise required approval of the shareholders of UBS and Credit Suisse in order to increase transaction security.
Axel P. Lehmann, Chairman of the Board of Directors of Credit Suisse, said: “The announced merger represents the best possible outcome given the extraordinary and unprecedented circumstances. Credit Suisse has been through an extremely difficult period. Although the team has worked tirelessly to clean up many significant legacy issues and implement the new strategy, today we are forced to adopt a solution that will deliver a sustainable outcome.”