Swiss Banking Merger Talks Underway: UBS Group, Credit Suisse Discuss Options
Switzerland's two largest banks, UBS Group AG (NYSE:UBS) and Credit Suisse Group AG (NYSE:CS), are reportedly in talks to merge, in what could be the most consequential banking combination since the financial crisis of 2008. The Financial Times reported late Friday, citing people briefed on the talks.[0]
Under one likely scenario, UBS would acquire Credit Suisse to obtain its wealth and asset management units, while possibly divesting its investment banking division, the people said.[1] The fate of Credit Suisse’s profitable Swiss universal bank remains undecided, as it is likely attractive to UBS, but may leave the country’s domestic banking sector too concentrated, the people said.[1]
The FT also reported that UBS is assessing the risks a deal could have for itself, as it prefers to focus on its own wealth-centric, standalone strategy.[2] Further, both UBS and Credit Suisse are opposed to a forced combination, Bloomberg reported earlier.[3]
One person briefed on the talks told the FT that the two Swiss banks are exploring an array of solutions.[3] This could include Credit Suisse splitting its businesses and divesting its wealth management activities to UBS or a different buyer, two of the people said. Other solutions being considered could be further split-ups of Credit Suisse's business or an IPO of the domestic business.
Meanwhile, the boards of both banks are meeting separately this weekend to weigh the idea, the FT said.[0] The Swiss National Bank and regulator Finma are also involved in the discussions.[2]
U.S. investment giant BlackRock Inc. (NYSE:BLK) has also weighed in on the potential deal, stating it is not participating in any plans to acquire all or any part of Credit Suisse, and has no interest in doing so.[4]
0. “UBS and Credit Suisse Considering Possible Merger” finews.com, 18 Mar. 2023, https://www.finews.com/news/english-news/56305-ubs-credit-suisse-merger
1. “Credit Suisse Crisis Nears Finale as UBS Discussions Heat Up” Yahoo News, 18 Mar. 2023, https://news.yahoo.com/ubs-seeks-swiss-backstop-credit-115808443.html
2. “UBS is considering buying troubled Credit Suisse in what would be just the latest banking upheaval since the industry’s recent tumble into chaos” Fortune, 17 Mar. 2023, https://fortune.com/2023/03/17/ubs-credit-suisse-talks-acquisition-banking/
3. “UBS said to be in talks to take over embattled lender Credit Suisse (NYSE:CS)” Seeking Alpha, 17 Mar. 2023, https://seekingalpha.com/news/3948655-ubs-said-to-be-in-talks-to-take-over-embattled-lender-credit-suisse
4. “BlackRock denies report that it's preparing a takeover bid for Credit Suisse” CNBC, 18 Mar. 2023, https://www.cnbc.com/2023/03/18/blackrock-is-working-on-a-rival-takeover-bid-for-credit-suisse-financial-times-reports.html
