UBS expects to finalize the Credit Suisse acquisition as early as June 12

UPS expects to complete its acquisition of Credit Suisse “As early as June 12,” which will create a giant Swiss bank with a $1.6 trillion budget after a government-backed bailout earlier this year.

UBS said in a statement Monday that completion of the transaction is subject to the registration statement, which covers shares to be delivered, declared valid by the SEC, and other remaining closing conditions.

“UBS expects to complete the acquisition of Credit Suisse as early as June 12, 2023. At that time, Credit Suisse Group AG will be merged into UBS Group AG,” the company said.

UBS shares were up 1.22% in early trading Monday, while Credit Suisse shares were up 1.89%.

“We view the completion of the acquisition as an important step in kick-starting what we see as a lengthy integration process and getting things done,” said Michael Klein, analyst at Zuercher Kantonalbank.

He added, “Although UBS’s risk profile has changed significantly, we see good opportunities for investors.”

Switzerland no. Bank One agreed on March 19 to pay 3 billion Swiss francs ($3.37 billion) and bear up to 5 billion francs in losses to its smaller Swiss rival after a collapse in customer confidence brought it to the brink of collapse, prompting Swiss authorities to act. to stave off a broader banking crisis.

The bank had aimed to close its biggest bank transaction since the global financial crisis by late May or early June. However, it said last month that it was still in talks with Swiss authorities about loss protection and capital requirements, suggesting those need time to sort out.

UBS added that upon completion, Credit Suisse shares and American Depository Shares (ADS) will be delisted from the SIX Swiss Exchange (SIX) and the New York Stock Exchange (NYSE). SIX said in a separate statement that Credit Suisse shares will be delisted on June 13 at the earliest.

Under the all-share takeover, Credit Suisse shareholders will receive 1 share of UBS for every 22.48 shares they own.

The deal would create a group overseeing $5 trillion in assets, giving UBS overnight a leading position in key markets that could take years to grow in size and reach.

The huge bank will employ 120,000 people worldwide, although it has already announced that it will cut jobs to take advantage of synergies and reduce costs.

UBS was rushing to close the deal in record time, hoping to provide greater certainty to Credit Suisse’s clients and employees, and avoid departures.

The deal was backed by CHF200 billion in liquidity support from the Swiss Central Bank as well as a commitment by the government to absorb up to CHF9 billion in losses on top of those incurred by UBS.

“We also have to be clear… this is an acquisition, not a merger,” UBS chief executive Sergio Ermoti said at a financial conference on Friday, warning of “painful” decisions ahead.

The Financial Times reported on Sunday that Switzerland’s largest bank is considering postponing its quarterly results until the end of August as it deals with complications arising from the acquisition.

The bank declined to comment on the possible delay.

There remains a question mark over what UBS will do with Swiss retail bank Credit Suisse, long seen as the group’s “crown jewel”.

Bringing it into the UBS fold could result in significant savings but concerns have been raised about the size of the combined entity as well as job cuts.

Ermoti said on Friday that the bank was still analyzing the situation, though the “base scenario” remained a full merger with UBS and would not be swayed by “nostalgia” when deciding how to proceed.

Ermotti, who was brought back to UBS to direct the takeover, was optimistic about the challenges ahead and dismissed concerns that the new bank was too big for Switzerland.

“I am convinced this will be a great story not only for our shareholders and employees but also for our customers and for the financial services industry in Switzerland,” he said on Friday.

— CNBC contributed to this report.