Credit Suisse to be bought by UBS for about $1 billion: Report

UBS is reportedly close to finalizing a deal to acquire Credit Suisse for $1 billion, as the latter’s shares hit record lows due to years of scandal and instability. According to sources, the Swiss government is expected to announce the deal soon, bypassing typical financial rules to speed up the process.

Credit Suisse’s shares had plummeted to an all-time low, dropping by 33% before settling at 25% on March 16, following a two-day decline. Despite a nearly $54 billion bailout from the Swiss National Bank, the bank struggled to stay afloat.

Under the proposed purchase terms, UBS will pay only a fraction of Credit Suisse’s estimated value of $9.5 billion as of Friday, and the deal could be subject to change or even fall through.

Although Credit Suisse’s failure is not directly tied to the collapse of Silicon Valley Bank, the impact of the latter’s banking failure in the United States exacerbated investor fears, leading to the decline in Credit Suisse’s stocks.

The banking crisis at Silicon Valley Bank, which suffered a negative cash balance of nearly $1 billion, led to its closure on March 9, with the Federal Reserve, Justice Department, and Securities and Exchange Commission investigating the matter.

Treasury Secretary Janet Yellen has assured Congress that the U.S. banking system “remains sound” despite the week-long financial turmoil, and the terms of the Credit Suisse-UBS deal could still change or fall apart.