The US Federal Reserve Board of Governors has approved the merger of UBS Group AG and Credit Suisse Bank. The US Fed was notified of the situation and said that it had approved the UBS-Credit Suisse agreement for the purchase of Credit Suisse’s US businesses by UBS Group AG. The US Fed went on to say that the UBS Group had requested permission for the transaction on March 22.
According to the US Fed’s board of governors, in this Swiss-brokered rescue deal, UBS Group AG has committed to providing the US Federal Reserve with an implementation plan for the amalgamation of its American operations and businesses with Credit Suisse subsidiaries within three months of the UBS-Credit Suisse deal’s completion.
According to the US Fed, due to the increasing scale of the firm, this UBS-Credit Suisse investment banking merger would contain more stringent procedures, including liquidity rules for the bank.
When a bank purchases any voting shares of a company with assets of $10 billion or more, the US Federal Reserve is required by law to conduct an investigation into bank mergers.
UBS-Credit Suisse deal — explained
When Zurich-based rival UBS came to the rescue last month with a merger that Swiss regulators orchestrated and funded, the 167-year-old Credit Suisse Bank was on the verge of failure. Credit Suisse has agreed to be acquired by UBS for 3 billion Swiss francs ($3.3 billion), a fraction of its previous market value.
According to Reuters, the Swiss authorities and UBS Group AG have been rushing to complete the purchase of Credit Suisse Group AG within a month in order to retain the lender’s customers and workers.
UBS received interim permission from European Union antitrust authorities earlier this month, but it must still get authorization under EU merger regulations. According to persons familiar with the process, the Bank of England has authorised the acquisition in the United Kingdom.
According to UBS, the transaction will result in a company with more than $5 trillion in total invested assets.
Holders of Credit Suisse AT1 notes will earn nothing under the Credit Suisse UBS merger agreement, while shareholders, who typically rank below bondholders in terms of remuneration, would receive $3.23 billion.