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Published: Mar 18, 2023, 17:37 UTC•1min read
(Reuters) – U.S. authorities are working with Swiss counterparts to broker a deal for UBS AG to buy all or part of Credit Suisse Group AG, Bloomberg News reported on Saturday citing people familiar with the matter.
(Reuters) – U.S. authorities are working with Swiss counterparts to broker a deal for UBS AG to buy all or part of Credit Suisse Group AG, Bloomberg News reported on Saturday citing people familiar with the matter.
U.S. officials might seek to weigh in on matters which can impact the finals terms of the deal between the banks, according to the report.
An official at the Federal Reserve declined to comment on the report, while the Treasury Department did not immediately respond to a Reuters request for comment.
UBS is mulling a takeover of its embattled Swiss peer, sources have told Reuters. The plan could see the Swiss government offer a guarantee against the risks involved, while Credit Suisse’s Swiss business could be spun off.
U.S. and European banking executives and regulators have taken measures to shore up the industry to restore confidence. The Biden administration has moved to backstop consumer deposits while the Swiss central bank loaned billions to Credit Suisse to stabilize its shaky balance sheet.
(Reporting by Akanksha Khushi in Bengaluru; Editing by Chizu Nomiyama)
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U.S. authorities are reportedly preparing to weigh in on the possible merger between Credit Suisse and UBS, according to a recent report from Bloomberg News.
The idea of a merger between the two large Swiss banks was first floated in January when Credit Suisse reportedly made an inquiry to UBS about combining the two in a deal that could create the largest wealth management firm in Europe and one of the biggest on the global stage.
The idea was met with opposition from some UBS executives, who reportedly argued it would be a “bet the company” move by Credit Suisse. The banks have since been in talks to discuss a potential merger and, according to reports from Bloomberg, U.S. authorities are now looking into the possibility.
The U.S. Department of Justice, Federal Reserve, and other agencies are reportedly exploring the deal to see if it would be in keeping with competition rules, as well as rules regarding foreign ownership of U.S. banks. The inquiry is not believed to be near completion and is still in the early stages.
Experts believe the deal could create significant cost savings for both companies and could result in a more competitive landscape for the banking and wealth management industries. It could also result in a wider range of services and options for customers.
If a merger takes place, it would require approval from the U.S. authorities, as well as regulators in other countries. It also requires board and shareholder approval. Until all these hurdles are cleared, the merger will remain a possibility but not a certainty. It could be a long while before the fate of the possible deal is decided.
