Credit Swiss Sold to UBS

Credit Suisse, one of Switzerland’s oldest and largest banks, has been sold to its rival UBS in a deal worth more than $2 billion. The sale was engineered by Swiss authorities to prevent a financial crisis after Credit Suisse suffered a series of scandals and losses that eroded its capital and reputation.

The deal, which will create the world’s largest wealth manager with over $4 trillion in assets under management, was announced on Sunday evening after UBS increased its offer from $1 billion to more than $2 billion. UBS will pay about 0.5 francs per share in its own stock, a steep discount to Credit Suisse’s closing price of 1.86 francs on Friday.

The Swiss National Bank and the regulator Finma played a key role in brokering the deal, which will bypass a shareholder vote by changing the country’s laws. The SNB also agreed to provide a $100 billion liquidity line to UBS as part of the deal.

The sale marks the end of an era for Credit Suisse, which was founded in 1856 and had managed more than $1 trillion in assets. The bank had been struggling for years with legal troubles, risk management failures and strategic missteps that culminated in the collapse of several smaller US lenders that it had financed.