UBS Group AG announced Friday that it has formally completed the legal merger with Credit Suisse AG, finalizing the deal brokered by regulators 18 months ago to prevent the collapse of its rival.
UBS Formally Completes Merger Of Credit Suisse : Global Regulatory Support
UBS stated that the merger of the parent companies was completed “within the expected timeline and was facilitated by the strong support from regulators across the globe.” This crucial support was instrumental in merging the two banking giants.
UBS Formally Completes Merger Of Credit Suisse : Credit Suisse Deregistered
With the completion of the merger, Credit Suisse has been deregistered as a company in Zurich, effectively dissolving its separate existence and integrating fully with UBS. “Today we have achieved a significant milestone in our integration journey,” said Sergio Ermotti, chief executive of UBS. “The merger of our parent banks is critical to facilitating the migration of clients onto UBS platforms.”
Integration of Clients and Operations
UBS detailed that Credit Suisse’s clients and operations will be integrated into UBS over time. For now, customers of Credit Suisse will continue to use existing Credit Suisse platforms. The U.S. business of both banks will be combined on June 7, and their Swiss units will merge by September, pending regulatory approval.
Cost-Reduction and Shareholder Returns
UBS plans to complete the full integration of the broader groups by the end of 2026, aiming to reduce costs by $10 billion. Additionally, UBS has committed to returning $2 billion to shareholders by 2026 through a buyback program, surpassing pre-merger buyback levels.
Details of the Emergency Takeover
In June 2023, UBS completed the emergency takeover of Credit Suisse for 3 billion Swiss francs ($3.3 billion). This transaction, brokered by Swiss authorities, was a significant reduction from Credit Suisse’s $8.1 billion value just a day before the deal announcement. Initially, the combined entity consisted of two separate parent companies managing their own subsidiaries and clients, with the UBS board holding overall responsibility.
UBS Formally Completes Merger Of Credit Suisse : The Downfall of Credit Suisse
Credit Suisse’s troubles escalated in March 2023 when investors and customers lost confidence in its recovery prospects. The bank faced five consecutive quarterly losses, management upheavals, reputational damage from scandals, and increasing litigation and regulatory costs, ultimately leading to its merger with UBS.
