UBS to Acquire Credit Suisse
March 19 2023 - 03:00PM
Business Wire
- Creates leading global wealth manager with USD 5 trillion of
invested assets across the Group
- Extends UBS lead in Swiss home market
- UBS strategy unchanged, including focus on growth in
Americas and APAC
- Attractive financial terms which include downside
protection
- Annual run-rate of cost reduction of more than USD 8 billion
expected by 2027
- UBS remains strongly capitalized well above our target of
13% and committed to progressive cash dividend policy
- A focused Investment Bank, remaining committed to UBS’s
model; strategic Global Banking businesses to be retained, majority
of Credit Suisse markets positions moved to non-core
Transaction creates significant sustainable value for UBS
shareholders
Regulatory News:
Ad hoc announcement pursuant to Article 53 of the SIX Exchange
Regulation Listing Rules
UBS (NYSE:UBS) (SWX:UBSN) plans to acquire Credit Suisse. The
combination is expected to create a business with more than USD 5
trillion in total invested assets and sustainable value
opportunities. It will further strengthen UBS’s position as the
leading Swiss-based global wealth manager with more than USD 3.4
trillion in invested assets on a combined basis, operating in the
most attractive growth markets.
The transaction reinforces UBS’s position as the leading
universal bank in Switzerland. The combined businesses will be a
leading asset manager in Europe, with invested assets of more than
USD 1.5 trillion.
UBS Chairman Colm Kelleher said: “This acquisition is attractive
for UBS shareholders but, let us be clear, as far as Credit Suisse
is concerned, this is an emergency rescue. We have structured a
transaction which will preserve the value left in the business
while limiting our downside exposure. Acquiring Credit Suisse’s
capabilities in wealth, asset management and Swiss universal
banking will augment UBS’s strategy of growing its capital-light
businesses. The transaction will bring benefits to clients and
create long-term sustainable value for our investors.”
UBS Chief Executive Officer Ralph Hamers said: “Bringing UBS and
Credit Suisse together will build on UBS’s strengths and further
enhance our ability to serve our clients globally and deepen our
best-in-class capabilities. The combination supports our growth
ambitions in the Americas and Asia while adding scale to our
business in Europe, and we look forward to welcoming our new
clients and colleagues across the world in the coming weeks.”
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/share for a total consideration
of CHF 3 billion. UBS benefits from CHF 25 billion 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.
The combination of the two businesses is expected to generate
annual run-rate of cost reductions of more than USD 8 billion by
2027.
UBS Investment Bank will reinforce its global competitive
position with institutional, corporate and wealth management
clients through the acceleration of strategic goals in Global
Banking while managing down the rest of Credit Suisse’s Investment
Bank. The combined investment banking businesses accounts for
approximately 25% of Group risk weighted assets.
UBS anticipates that the transaction is EPS accretive by 2027
and 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.
Conference Call
Management will be hosting an analyst call at 10pm CET.
Participants can access the webcast via the following link
https://stream.swisscom.ch/ubs/20230319/
Cautionary statement regarding forward-looking
statements
This document contains statements that constitute
forward-looking statements. While these statements represent UBS’s
judgments and expectations concerning the matters described, a
number of risks, uncertainties and other important factors could
cause actual developments and results to differ materially from
UBS’s expectations. Additional information about those factors is
set forth in documents furnished and filings made by UBS with the
US Securities and Exchange Commission, including the Annual Report
on Form 20-F for the year ended 31 December 2022. UBS undertakes no
obligation to update the information contained herein.
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