UBS to complete Credit Suisse takeover as early as June 12

BLOOMBERG 

UBS Group AG expects to complete its acquisition of Credit Suisse Group AG as early as June 12, creating a new powerhouse in European banking and ending weeks of uncertainty for the lenders’ more than 100,000 employees.
The closing of the deal is still subject to certain conditions, including some that UBS said it could waive, according to a statement on Monday. Upon completion, Credit Suisse shares will be delisted from the Swiss SIX Stock Exchange on June 13 and the New York Stock Exchange on June 12.
Shareholders of Credit Suisse will receive one UBS share for every 22.8 outstanding shares held. All of Credit Suisse’s outstanding debt securities will become obligations of UBS.
The deal, agreed in March with the backing of the Swiss government amid fears that the smaller competitor was hurtling toward failure, will reshape the global battle for the lucrative business of managing elite wealth. It will create a megabank that not only dwarfs every other Swiss lender but is double the size of the nation’s economy.
UBS had originally guided that the takeover of its smaller rival would be completed as early as the end of May or beginning of June. But the closing risked delay because UBS and the Swiss government were still negotiating the precise terms of a 9-billion Swiss franc ($9.9 billion) state guarantee for losses the bank might incur, Bloomberg News previously reported.
The loss-guarantee was necessary because there was little time to do due diligence and Credit Suisse has hard-to-value assets that UBS plans to wind down. If that results in losses, UBS would assume the first 5 billion francs and the government the next 9 billion francs.
UBS said earlier it expects mark-downs of about $13 billion on Credit Suisse assets and also estimated that legal liabilities may cost as much as $4 billion over 12 months. It also said it may see an estimated $34.8 billion paper gain as a result of the takeover.
The bank expects that principal terms of the so-called Loss Protection Agreement will be set before the closing of the acquisition, but not the regulatory implications, according to a filing. UBS and regulators are still determining what adjustments to liquidity and capital requirements and risk-weighted asset measures the combined entity will need to make.
UBS has said it may need to delay its second-quarter results publication from the original date of July 25 to be have enough time from the deal’s closing to provide combined financial statements.
The Financial Times reported that it could take until the end of August before it publishes earnings.