UBS, Switzerland’s largest bank, has agreed to buy Credit Suisse in a Swiss-assisted bid to calm financial markets amid the Covid-19 pandemic. The deal, which values Credit Suisse at approximately $25 billion, is the largest banking merger in the country’s history. It will create a dominant Swiss banking group with a combined market value of around $106 billion.
The Swiss government is providing $7.4 billion in financial support for the merger, with UBS also contributing $2 billion. The deal is expected to close in the fourth quarter of 2020, subject to regulatory and shareholder approval.
The merger is being seen as a move to protect Switzerland’s banking sector from the impact of the coronavirus pandemic. Credit Suisse has been particularly hard hit by the crisis and the move will help both banks to navigate the difficult economic conditions.
The merger is also expected to benefit customers by providing more competitive offerings and cost savings through greater efficiency. Both UBS and Credit Suisse have committed to maintaining their existing operations in Switzerland.