Swiss investment bank UBS Group AG UBS and its beleaguered peer Credit Suisse AG CS have reached an agreement for the former to acquire the latter in a deal brokered by the Swiss government, according to multiple reports.
UBS has agreed to pay over $2 billion in stock to acquire Credit Suisse, the Financial Times reported on Sunday. The deal, which will officially be announced Sunday evening, is priced at a fraction of Credit Suisse’s closing price on Friday, the publication noted.
Following negotiations, UBS agreed to sweeten its offer to 0.50 Swiss francs ($0.54) in its stock from an original offer price of 0.25 Swiss francs, according to the Financial Times. The updated offer still represents a whopping 73% discount — NYSE-listed shares of Credit Suisse closed the week at $2.01.
The Swiss National Bank has also reportedly offered to provide a $100 billion liquidity line to UBS to facilitate the deal. Swiss regulators are looking to amend the country’s laws to forego shareholder approval.
In addition, UBS has agreed to a softening of a “material adverse change clause,” which would nullify the deal if its credit default spreads jump. Bloomberg reported that the Swiss government is scheduled to host a press conference at 2:30 p.m. EDT.
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