UBS Gets EU Approval for Credit Suisse Acquisition

UBS has secured unconditional antitrust approval from the European Union to acquire Credit Suisse. The acquisition forms part of a meticulously orchestrated rescue effort spearheaded by the Swiss government to salvage its struggling counterpart.

The European Commission announced its decision on Thursday, stating that the acquisition would not pose any competition concerns within Europe. This decision corroborates an earlier report by Reuters. In a statement issued by the EU competition watchdog, it was emphasized that the amalgamation of the two banking giants would continue to face robust competitive pressures from various players across different markets.

“The combined entity will continue facing significant competitive pressure from a wide range of competitors in all of those markets, including several major global banks as well as specialist providers and strong local players,” the statement read.

Read more: EU Set To OK UBS-Credit Suisse Deal

The acquisition deal, valued at 3 billion Swiss francs in stock, also includes UBS assuming up to 5 billion francs in losses. This strategic move was orchestrated in March by Swiss authorities as a preventive measure to stave off potential contagion within the global banking sector.

UBS, being twice the size of Credit Suisse in terms of assets, has emerged as a crucial player in the rescue efforts. Both UBS and Credit Suisse are among the 30 globally systemically important banks closely monitored by regulators. The failure of Credit Suisse would have reverberated throughout the entire financial system, underscoring the urgency and necessity of the government-backed merger.

The approval from the EU represents a significant milestone in the acquisition process, providing a green light for UBS to proceed with its plans to absorb Credit Suisse.

Source: UK Style Yahoo