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UBS & Credit Suisse Weighing Potential Merger Solutions

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Swiss banking giants UBS Group (NYSE: UBS) and Credit Suisse Group (NYSE: CS) are reportedly discussing an array of prospective merger solutions. According to the Financial Times, UBS is assessing the potential risks of a deal, while both banks are opposed to a forced combination.[0]

The Financial Times reported late Friday that UBS is weighing whether to acquire all or part of Credit Suisse. It is thought that UBS may opt to acquire Credit Suisse’s wealth and asset management units, but divest its investment banking division. Meanwhile, Credit Suisse’s profitable Swiss universal bank could be appealing to UBS, but the deal could leave the country’s domestic banking sector too concentrated.[1]

The boards of Switzerland’s two biggest banks plan to meet separately this weekend to weigh the idea, the FT said in its report.[2] U.S. investment giant BlackRock has indicated it is not interested in participating in any plans to acquire Credit Suisse.[3]

Other solutions possibly being considered could involve further split-ups of Credit Suisse’s business or an IPO of the domestic business at the same time that the wealth management and asset management businesses are sold to UBS or another interested party.[4] If a deal is reached, it would be Europe’s most consequential banking combination since the 2008 Great Recession.[4]

0. “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

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. “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

4. “UBS and Credit Suisse Considering Possible Merger” finews.com, 18 Mar. 2023, https://www.finews.com/news/english-news/56305-ubs-credit-suisse-merger

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