Mar 20, 2023
UBS Acquires Credit Suisse in $2 Billion Deal
On March 19, UBS Group made history by agreeing to purchase its competitor Credit Suisse for nearly $2 billion, doubling its initial offer of $1 billion. The deal marks a major milestone for the two biggest banks in Switzerland, according to the Financial Times.
The $1 billion offer was a significant discount from the bank’s market value on March 17, which was estimated at nearly $8 billion, according to data from Companies Market Cap. To close the deal, Swiss authorities agreed to make regulatory changes to bypass a shareholder vote and announce the agreement over the weekend, before the markets opened.
In addition, the Swiss National Bank (SNB) committed to providing over $100 billion in liquidity line to UBS. The FT reported that the deal was heavily influenced by the SNB and the Swiss Financial Market Supervisory Authority (FINMA), and was approved by US and European regulators.
However, if the deal between UBS and Credit Suisse had failed, Swiss authorities had discussed alternatives, including a full or partial nationalization of the bank as an emergency option. The rescue plan would also have resulted in losses to bondholders, causing European regulators to express concern about investor confidence in the region’s financial sector.
Credit Suisse was founded in 1856 to finance the expansion of Swiss railroads, and was the second-largest bank in the country. The bank’s largest shareholder, Saudi National Bank, said it wouldn’t increase its investment due to regulations, raising fears about possible shareholder financing and prompting UBS and Credit Suisse to enter into talks with regulators on March 15.
The news of UBS and Credit Suisse’s agreement has been met with enthusiasm in the web3 space, with many touting it as a major step forward for the industry. With the acquisition, UBS is now positioned to become a major player in the NFT and crypto markets, and many are speculating that the bank will use the opportunity to expand its services in the web3 space.
UBS could potentially leverage its new position to become a leader in NFT marketing, offering services such as Twitter NFT marketing, NFT promotion, and NFT marketing agency services. Similarly, the bank could use its web3 agency services to assist companies in selling NFTs.
Ultimately, the acquisition of Credit Suisse by UBS is a game-changer for the web3 space, and could lead to a new era of financial services for the industry.
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