A marriage born of pain rather than love.
After much speculation and with markets reeling from Monday morning panic over a looming bank crisis, UBS firmed up its shotgun acquisition of ailing Credit Suisse on Sunday afternoon.
Some key points behind the deal:
-
Purchase Price: over $3 billion
-
Who will run the combined entity: UBS Chairman Colm Kelleher and UBS CEO Ralf Hammer
-
Other: UBS eyes deal for EPS till 2027; Credit Suisse investment bank will close; $8 billion in total annual cost savings by 2027; Both banks have unrestricted access to existing facilities of the Swiss National Bank; UBS will suspend its stock buyback plan; Integration will take 3-4 years.
“This acquisition is attractive to UBS shareholders, but we must be clear, as far as Credit Suisse is concerned, this is an emergency rescue,” UBS chairman Colm Kelleher said in a statement, a very thinly-veiled statement. No pill. Credit Suisse Board and Executive Team.
“This is a historic day, and a day we hoped would not come,” Kelleher added on a analyst call Including UBS CEO Hammers. Credit Suisse executives or board members were not available on the call.
The deal could help calm a broader volatile financial system, but could upset UBS shareholders, a former UBS executive told Yahoo Finance.
“You go from operating the best of a Swiss bank at UBS with a clear strategy to becoming the worst owner,” the source said.
UBS declined to make CEO Ralf Hammer available for an interview. Credit Suisse declined to make outgoing chairman Axel Lehman available for an interview.
This is breaking news and will be updated.
Brian Sozzi is the executive editor of Yahoo Finance. Follow Sozy on Twitter @BrianSozzi and on LinkedIn, Tips on banking crisis? Email [email protected]
Click here for the latest stock market news and in-depth analysis, including events that move stocks
Read the latest financial and business news from Yahoo Finance