A marriage born out of pain, rather than love.
After much speculation and with markets on the cusp of a Monday morning panic at the hands of a rolling bank crisis, UBS solidified its shotgun acquisition of ailing Credit Suisse Sunday afternoon.
A couple of the key points behind the deal:
Purchase Price: More than $3 billion
Who Will Run the Combined Entity: UBS chair Colm Kelleher and UBS CEO Ralph Hamers
Other: UBS sees the deal accretive to EPS by 2027; Credit Suisse investment bank will be wound down; Total annualized cost savings of $8 billion by 2027; Both banks have unrestricted access to the Swiss National Bank existing facilities; UBS will suspend its stock buyback plan; Integration will take 3-4 years.
"This acquisition is attractive for UBS shareholders but, let us be clear, as far as Credit Suisse is concerned, this is an emergency rescue," said UBS chair Colm Kelleher in a statement, taking a not-too-thinly-veiled shot at the Credit Suisse board and executive team.
"It's a historic day, and a day we hoped would not come," Kelleher added on an analyst call that included UBS CEO Hamers. Credit Suisse executives or board members were not on the call.
UBS execs added on the call they would move "fast" to wind down Credit Suisse's investment bank. The company said it had taken reserves against Credit Suisse's high-profile litigation matters.
The deal may help calm the broader jittery financial system, but could unsettle UBS shareholders, a former high-ranking UBS exec tells Yahoo Finance.
"You go from having the best run Swiss bank in UBS with a clear strategy, to owning the worst," the source added.
UBS declined to make Hamers available for an interview. Credit Suisse declined to make outgoing chairman Axel Lehmann available for an interview.
Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn. Tips on the banking crisis? Email [email protected]
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