Tue, Jun 06, 2023 page10

• UBS may complete takeover by June 12

  TOP EXECUTIVES: UBS is planning to retain more than 100 Credit Suisse investment bankers across Asia as it seeks to shore up talent in markets where the latter dominated

  • Bloomberg
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  UBS Group AG expects to complete its acquisition of Credit Suisse Group AG as early Monday next week, it said in a statement yesterday.

  The closing of the deal is still subject to certain conditions, which UBS can waive, the statement said.

  Upon completion, Credit Suisse shares would be delisted from the New York Stock Exchange on Monday next week and the Swiss SIX Stock Exchange on Tuesday next week.

  

  The offices of Swiss banks UBS and Credit Suisse at Paradeplatz in Zurich, Switzerland, are pictured on March 20.

  Photo: Reuters

  Shareholders of Credit Suisse will receive one UBS share for every 22.8 outstanding shares held. All of Credit Suisse’s outstanding debt securities will become obligations of UBS.

  UBS had originally guided that the takeover of its smaller rival would be completed as early as the end of last month or beginning of this month. However, the closing risked delay because UBS and the Swiss government were still negotiating the precise terms of the 9 billion Swiss francs (US$9.9 billion) state guarantee for losses the bank might incur, Bloomberg News previously reported.

  UBS agreed to take over Credit Suisse this year in an emergency sale backed by the Swiss government, amid fears that the smaller troubled competitor was hurtling toward bankruptcy.

  UBS has said it might need to delay its second-quarter results publication from the original date of July 25 to have enough time from the deal’s closure to provide combined pro-forma financial statements.

  The bank expects that principal terms of the so-called Loss Protection Agreement would be set before the closing of the acquisition, but not the regulatory implications, it said in a filing last month.

  UBS and regulators are still determining what adjustments to liquidity and capital requirements and risk-weighted asset measures the combined entity will need to make.

  The Swiss government’s loss-guarantee was necessary, because there was little time to do due diligence and Credit Suisse has hard-to-value assets that UBS plans to wind down. If that results in losses, UBS would assume the first SF5 billion and the government the next SF9 billion.

  UBS last month said it expected markdowns of about US$13 billion on Credit Suisse assets and also estimated that legal liabilities might cost as much as US$4 billion over 12 months. It also said it might see an estimated US$34.8 billion paper gain as a result of the takeover.

  Meanwhile, UBS is looking to retain more than 100 Credit Suisse investment bankers across Asia, seeking to shore up talent in markets where its Swiss rival has stronger presence, people familiar with the matter said.

  The bank is in advanced discussions to keep dozens of Credit Suisse’s senior dealmakers in the region, spanning from South Korea, Thailand, Vietnam to India, proposing compensation targets for a group of managing directors, the people said, asking not to be identified because the matter is private.

  Among the people targeted to stay on is Allan Chu (朱達之), Asia-Pacific head of telecommunications, media and technology, as well as various country heads in South Korea and some of the Southeast Asia markets, the people said.

  UBS would also retain a considerable number of bankers in India, where the merger would enable it to rebuild its presence after shutting down the local team in late 2021.

  The retention target of more than 100 bankers does not include China, where the two banks have considerable overlaps.

  In mainland China, UBS has held talks with Janice Hu (胡知鷙), Credit Suisse’s country chief executive officer, as well as a few other senior bankers, the people said. Hu’s role is still being discussed. The final number of China bankers being kept would depend on discussions with regulators, they added.
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