UBS agrees to buy Credit Suisse for over $2 billion: report

New Delhi: The Financial Times on Sunday reported that UBS has agreed to buy Credit Suisse after raising its offer to more than $2 billion.
UBS Group AG Emergency talks are underway to buy fellow Swiss banking giant as authorities bid to contain the turmoil when markets reopen on Monday.
Earlier, reports said that UBS has offered to pay up to $1 billion.
However, Credit Suisse, which ended Friday with a market value of about 7.4 billion francs ($8 billion), believed the offer was too low and would hurt shareholders and employees, who bought the stock. has been postponed, people with knowledge of the matter told Bloomberg.
Officials are racing to save the 167-year-old bank, one of the world’s largest wealth managers, after a brutal week that saw the second and third largest US banks fail in history. As one of 30 global banks considered systemically important, any deal for Credit Suisse could cause ripples in global financial markets.
At least two major banks in Europe are examining scenarios of possible contagion spreading to the region’s banking sector and are looking to the Federal Reserve and the European Central Bank to step in with strong signals of support, knowledge of the discussion said. two senior officials told Reuters.
Bloomberg reported that Switzerland is considering taking over the bank outright or keeping a significant equity stake if the acquisition falls through.
Credit Suisse and UBS declined to comment, and the Swiss government did not immediately respond to a request for comment.
The Financial Times reported that the all-share deal could be signed on Sunday. Citing people familiar with the matter, it said Sunday’s offer was worth 0.25 Swiss francs ($0.27) per Credit Suisse share, significantly lower than Friday’s closing price of 1.86 Swiss francs, and the bank’s existing shareholders eliminated.
UBS The report also stressed on a “material adverse change” that voids the deal if its credit default rises by 100 basis points or more. It added that there is no guarantee that the terms will remain the same or that a deal will happen.
A person with knowledge of the talks previously told Reuters that UBS had sought $6 billion from the Swiss government as part of a possible buyout of its rival. The guarantees would cover the costs of winding up parts of Credit Suisse and possible litigation fees.
A source had earlier said that talks were facing significant hurdles, and that up to 10,000 jobs could have to be cut if the two banks were combined. swiss bank employees union On Sunday called for the immediate formation of a task force to deal with the risks to jobs.
Swiss broadcaster SRF and other media reported that the government would hold an “important” press conference later on Sunday. He did not give further details.
Shares of Credit Suisse lost a quarter of their value last week. The bank was forced to tap $54 billion in central bank funding as it tries to recover from scandals that have undermined investor and customer confidence.

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