UBS has offered to buy Credit Suisse for up to $1 billion, according to the Financial Times. The deal could be signed as soon as this evening and values Credit Suisse at around $7 billion less than its market value at Friday’s close.
The move comes after a difficult period for both banks, with UBS having reported losses of over 4bn Swiss francs in 2020 and Credit Suisse reporting a loss of 2bn Swiss francs in the same year. Many analysts see this proposed merger as an opportunity for both banks to reduce costs and increase their competitive advantage in the banking sector.
If successful, this would create one of Europe’s largest wealth managers with combined assets worth more than 1 trillion euros ($1.2 trillion). It would also give UBS access to some key markets, such as Switzerland where it currently lacks presence due to its limited domestic operations there compared with larger rival Credit Suisse, which operates across multiple countries, including Germany, France, and Asia Pacific regions among others.
This potential merger has been welcomed by investors who believe that it will bring greater stability into the European financial services industry while providing additional opportunities for growth through increased scale economies on offer from combining two large players like UBS & Credit Suisse together under a single entity structure in the future.
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