As per the Financial Times report on Sunday, UBS (UBSG.S) has raised its offer to more than $2 billion to acquire the Swiss banking behemoth Credit Suisse (CSGN.S).
The move comes as authorities attempt to prevent market turmoil when trading resumes, following a turbulent week that witnessed the second-and third-largest bank failures in U.S. history. Credit Suisse, which is one of the largest wealth managers worldwide and is among 30 global banks viewed as systemically significant, has been the focus of efforts to rescue the 167-year-old bank. Any agreement to acquire Credit Suisse could have a significant impact on global financial markets.
According to two knowledgeable senior executives who spoke with Reuters, a minimum of two major European banks are exploring potential scenarios where contagion may spread throughout the banking sector in the region. These banks are seeking stronger indications of support from both the European Central Bank and the Federal Reserve.
In a separate report, an individual familiar with the discussions revealed that UBS has requested $6 billion from the Swiss government as part of a potential acquisition of its competitor. The guarantees would cover any expenses related to winding down segments of Credit Suisse and potential litigation fees.
As per an earlier source, the ongoing discussions were facing substantial hurdles, and the consolidation of the two banks may require a reduction of up to 10,000 positions. In response to the potential risk to jobs, the Swiss Bank Employees Association has urged for the immediate establishment of a task force. On Sunday, Swiss media outlets, including SRF, reported that the government would hold a crucial press conference later that day. However, no further information was provided.
After losing a quarter of its value last week, Credit Suisse had to resort to $54 billion in central bank funding to regain stability following various scandals that have adversely affected the confidence of investors and clients.
