Shares of UBS Group AG (NYSE: UBS) experienced a significant surge of over 1% during pre-market trading today. The spike follows the completion of UBS’ acquisition of embattled rival Credit Suisse Group AG (CS). This takeover comes after nearly three months of negotiations. It follows a rescue deal arranged by the Swiss government to safeguard Switzerland’s reputation as a financial center and prevent market turmoil.
In an official statement, UBS confirmed the completion of the acquisition, marking a momentous milestone for the bank.
A statement from the bank said that “UBS has completed the acquisition of Credit Suisse today, crossing an important milestone.”
Last week, UBS announced its expectations to finalize the deal valued at 3 billion Swiss francs ($3.3 billion) on Monday. This coincides with the final trading day of Credit Suisse shares on the Swiss stock exchange. Consequently, Credit Suisse will no longer be traded on the New York Stock Exchange.
The merger between the two Zurich-based rivals has been a subject of concern due to potential job losses and legal disputes surrounding the terms of the deal. There are also apprehensions regarding the creation of a Swiss megabank that could be deemed “too big to fail.”
UBS CEO Sergio Ermotti emphasized the significance of this moment, not just for UBS but for Switzerland as a financial hub and as a country. He acknowledged that the coming months might be challenging but expressed confidence in the bank’s ability to navigate through them. Ermotti stated, “We are very focused on doing it right.”
The Swiss government orchestrated the rescue of Credit Suisse in March. This action was taken after the bank’s stock plummeted and customers hurriedly withdrew their funds. The customers feared a potential collapse that could have had a ripple effect on global financial markets, reminiscent of the failures of two U.S. banks.
UBS Chairman Colm Kelleher expressed his satisfaction with the completion of the transaction, saying, “I’m pleased that we’ve successfully closed this crucial transaction in less than three months, bringing together two global systemically important banks for the first time. We are now one Swiss global firm, and together, we are stronger.”
Ermotti highlighted the benefits that clients can expect from the acquisition. These include an enhanced global offering, broader geographic reach, and access to greater expertise.
Ermotti said that “We’ll present our clients an enhanced global offering, broader geographic reach, and access to even greater expertise.”
UBS Group AG will manage two separate parent banks, UBS and Credit Suisse. This ensures that each bank retains its own branches and customers.
Credit Suisse NYSE: UBS UBS UBS Group
