by IANS |
Geneva, March 20 (IANS) Credit Suisse will be taken over by Swiss banking giant UBS, the Swiss federal government has announced.
On Friday, the liquidity outflows and market volatility showed that it was no longer possible to restore the necessary confidence and that a swift and stabilising solution was absolutely necessary, the government was quoted by Xinhua news agency as saying.
"In this difficult situation, the takeover of Credit Suisse by UBS is the best solution for restoring the confidence that has been lacking in financial markets recently, and for best managing the risk to our country and its citizens," the government said on Sunday.
Under the terms of the all-share transaction, Credit Suisse shareholders will receive 1 UBS share for every 22.48 Credit Suisse shares held, equivalent to CHF 0.76/share for a total consideration of 3 billion Swiss francs, UBS said in a statement published on Sunday.
The combination is expected to create a business with more than $5 trillion in total invested assets and sustainable value opportunities, the statement said.
Swiss National Bank (SNB) will provide substantial liquidity assistance to support UBS's takeover of Credit Suisse, said the Swiss central bank in a statement published on Sunday.
This takeover was made possible with the support of the Swiss federal government, the Swiss financial market supervisory authority FINMA and the SNB, the statement said.
With the takeover of Credit Suisse by UBS, a solution has been found to secure financial stability and protect the Swiss economy in this exceptional situation, the statement said.
Both banks have unrestricted access to the SNB's existing facilities, through which they can obtain liquidity from the SNB, the statement said. (1 Swiss franc = $1.08)