UBS – Credit Suisse deal set to close next week

Following completion, Credit Suisse shares and American Depositary Shares (ADS) will be delisted from both the Swiss and New York stock exchanges.

UBS Group’s takeover of Credit Suisse Group is expected to close as early as Monday 12 June (2023), dependent on registration statement (share approval from the US Securities and Exchange Commission) and other closing conditions.

Credit Suisse shareholders are set to receive one UBS share for every 22.48 outstanding shares held and UBS will assume responsibility for Credit Suisse’s obligations under its outstanding debt securities.

Upon completion of the transaction, both Credit Suisse shares and American Depositary Shares (ADS) are to be delisted from the New York Stock Exchange (NYSE) and the SIX Swiss Exchange (SIX).

UBS confirmed its intention to take over Credit Suisse in March of this year with the deal subsequently reported to be worth more than $3.25 billion. After completion, UBS is set to assume all of the company’s assets and liabilities as it is merged into its business.

Following close, the plan is for a consolidated banking group with five business divisions under UBS AG. UBS previously confirmed that it would continue to operate the two parent companies separately “for the foreseeable future,” which included the branches, subsidiaries, and client and counterparty relationships. The business intends to integrate the two entities in a phased approach going forward.

Additionally, a new leadership structure will be rolled out upon completion, including the departure of UBS Group chief financial officer, Sarah Youngwood. Todd Tuckner, UBS global wealth management chief financial officer and head of business performance and risk management, is set to replace her.

The transaction was agreed without shareholders’ approval, pushed through under emergency ordinance, issued by the Swiss Federal Council. At the time, the Swiss National Bank said the takeover would “secure financial stability and protect the Swiss economy in this exceptional situation”.

The decision by the Swiss regulators to pay Credit Suisse equity-holders CHF3 billion, whilst writing down the value of AT1 debtholders to zero, raised some possible litigation concerns following announcement of the deal. The prospect of investors challenging the outcome remains.