A deal has been struck for UBS to buy Credit Suisse after the offer was doubled to $2 billion, one-quarter of where Credit Suisse was valued on Friday, according to reports in the Financial Times and Bloomberg.
The Swiss government brokered the deal. According to people familiar with the matter, the Swiss government was preparing to nationalize the bank if a deal could not be worked out. The purchase price will be paid in shares of UBS.
Last week, the Swiss central bank arranged a massive liquidity backstop to support Credit Suisse but that failed to reassure investors, bank customers, and trading counterparties. Several banks were said to cut-off trading with Credit Suisse on Friday, greatly increasing the stress on the bank.
Bank regulators wanted to put the deal in place before trading opens in Asia.
Swiss authorities are expected to enact a change to the law to allow the acquisition to move forward without a shareholder vote.
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