UBS / Credit Suisse Takeover
Have seen a few articles:https://www.businessinsider.com/ubs-in-talks-acqu…Thoughts? Would think that this would be at least good for current/incoming IB staff at CS.
Edit/Update (3-19-2023):
UBS will buy CS for .76 per share or (around) $3B. The Swiss Fed is supposedly offering additional “litquidity” to help compensate for the debt that will be taken on by UBS. The Swiss Fed has also agreed (as some of the above financing I believe) to help with around $9B of the $17B in “risky” bonds that are supposedly now worth $0 and are essentially a $17B loss.
Why would it be good for incoming? WSJ article says UBS would look to downsize the IB arm
Good point, didn’t get a chance to read the WSJ one. Truly believe we are in some serious trouble global Econ-wise over the next year.
How come?
Please enlighten us! Can’t wait to get your macro color after watching you post an article saying CS going under and being acquired for pennys on the dollar by a firm who said they’re winding down CS’ IB is good for incoming analyst class.
bump. Very interested to hear what peoples' thoughts are
I wonder what this means for the plan to have Michael Klein run CSFB. That was probably a decent outcome for whoever hasn't already fled the investment bank. If UBS is taking it over, there will probably be significant investment banking cuts at both UBS and CS.
Part of me still thinks this a manufactured "crisis" mainly triggered by rapid interest rate hikes. There is nothing fundamentally broken about the banking system like in 2008.
Agree, interested in the CSFB outcome here - for me the spinoff makes a lot of sense now but wonder if it would take too long given deal clearly needs to be done by Monday. Seems like UBS wants nothing to do with the IB arm and Klein seemed like a good leader
If UBS takes over the entire firm, I'd say pretty bad for CS incomings - similar to the 2009 acquisitions. CS IB groups have lost a lot of seniors, can't see any reason UBS would want so many IB people
Updating per reports for the people MSing me... "UBS will dramatically shrink Credit Suisse’s investment bank, so that the combined entity will make up no more than a third of the merged group, two of the people said."
Really? Credit Suisse’s IBD coverage and product teams have generally been better than UBS since 2008. UBS would gladly take them if they didn’t come with hairy liabilities associated with the prime brokerage and trading businesses
Wondering how this would impact incoming analysts at both UBS and CS? Are offers likely to be rescinded?
Not good
Delete
Don’t be a dick. Laughing at other people’s (potential) misfortunes is bad karma that will come back to get you. Dick.
How would this impact incoming CS LevFin analysts?
No one knows, need to see what happens
CS LevFin has already been absolutely gutted.
How will this impact incoming UBS interns?
Incoming UBS are safe, as for the CS incoming, UBS acquiring would be terrible outcome. UBS has no interest in CS IB arm
I understand there’s a lot of fear by this impending combination but no one here can tell you interns / incoming analysts how this will impact your offer. Even current employees at both CS and UBS are in the dark.
The unfortunate reality is that is new hire employment is one of the last priorities facing UBS / CS. We’ll first need to see whether the CS banking spinoff is still on the table at announcement to make an educated guess.
/ thread w this until we hear otherwise.. still so much that is undecided
"I have a passionate interest in working on mergers and Acquisitions and would love the opportunity to work full time as an ib analyst at this firm"
3 months later....
Oh no! Ubs and cs are merging! I might lose my job. Why would they do this!
you referring to incoming SA or first years
Everyone. Including current employees. We make a living pushing m&a to clients and then the moment your own firm does it and you are at risk of being a "synergy " yourself we all whine and cry about it?
Seeing lots of speculation on wso threads. As a current CS employee I can say that we’re totally in the dark right now and waiting for info in the news the same as everyone else. Crossing our fingers CSFB spin still happens / we are able to remain employed
The peanut gallery of WSO giving opinions like they are facts based on articles they read; no one is in the deal room with these people, all we can do is wait till Sunday evening to see how things shake out.
Exactly, I think only a select handful of US bankers (Eg Klein) are even in the loop right now. I think the deal is being negotiated in Swiss German in some war room in Zurich.
Fingers crossed for you guys man, hopefully it works out for the best
Does that mean our summer internship is screwed?
We're f*cking toast. I'm pissed off, I've been waiting for 1+ years for this internship and this was my last summer to do an internship before graduating.
I got FSG, what about you?
I really feel for you bro. CS sponsors is damn legit! I'm not in CS but definitely wanted CS Sponsors
I am so angry too... Got my top pick of group and now who knows...
Uk or us?
US
Same for me. I am an incoming IB summer intern in Zurich. So fucking worried that the offer is gonna be rescinded...
In the same boat man I am incoming in US… really worried
Follow
incoming UBS US SA here. kinda worried what will happen next tbh.
word from the bank on day-to-day is BAU and they expect deal to close by end of 2023. Good chance summers will still have their internship.
What about full times?
He just said end of
year, don’t FT start in mid July for the most part?
Ubs investor pres said close in Q2 2023, so in the next 3 months basically. Very quick
what will this mean for 2023 SA?
Impossible to know. You’ll probably get word later this week once things settle
I have double-checked with trusted sources - they are probably wiping out the CS IB arm and focus on WM, or a small portion of CS IB will be merged with UBS IB. Either way with the shrinking UBS IB in size, the SA programs will not be canceled but the returns look bleak for both banks' interns.
In simple terms - start looking for full time opportunities early!
what's ur trusted source?
ex-senior banker who now focuses on recruiting
It's important to note that any takeover of a large financial institution like UBS or Credit Suisse would involve complex negotiations, regulatory approvals, and other factors. Market rumors and speculation about a takeover should always be taken with a grain of salt, as they are often based on incomplete or inaccurate information.
As the dust starts to settle after yesterday's announcements, it is becoming more and more clear what was already known before: UBS and CS do not fit together. Synergies are very limited with strongly overlapping businesses and a value proposition, especially in the core business wealth management, that was mainly "not being UBS/CS". So what is the whole point of this exercise?
CS has four business divisions of which three bear good value and you guessed it, IB is not one of them. In 2017 there was the idea to float the Swiss Bank that is still valued at around USD 10-15bn. The WM business is second ex-US only to UBS and DB and BlackRock keep eyeing the AM division. There was always a good opportunity to buy CS and sell its parts. However, the blackbox IB and legacy assets made this impossible to value/assess the risks.
A merger of UBS and CS in normal times would have always caused anti trust issues in Switzerland. This was addressed yesterday and put aside (for now). However, the issue prevails. The key issue within IB was specifically addressed by the CHF 9bn state guarantee for "certain risks" which specifically addresses legacy derivatives within IB. Also wiping out USD 17bn in AT1 bonds are adding to a buffer for UBS to finally shut down the problematic issues within the IB.
I do not think the idea is that UBS is actually taking over CS. The better idea would have been for the Swiss government to take over, wind down the IB and sell parts of CS. However, Switzerland is too small and the government has zero expertise to stem this task. Hence, UBS is stepping in, snapping up CS at a bargain price and does the job instead. They are partially covered for the risks in IB and the potential value are proceeds from selling AM, IPO the Swiss Bank and probably take over parts of WM or sell it as well. What is left of IB is either integrated into UBS or sold back to Michael Klein.
Interested to hear other thoughts.
No reason to IPO the Swiss Bank if the Swiss government is letting them keep it. WM has synergy in regional coverage in APAC, SA etc, and WM is also very much dependent on scale. Also in IB the parts that UBS wants to keep (US advisory) are also the ones that Klein wanted, so no sale.
This is coming directly from their internal memos. Sure maybe strategy will change in the future but don't see the point in lying to their employees right now.
I personally don't think WM is nearly as synergetic as it's made out to be and may pose problems with integration. I read somewhere that a considerable amount of the WM base across CS and UBS are from the same UHNW clients who had accounts at both banks for diversification purposes. Now that UBS is taking over CS's WM I wouldn't be surprised if CS sees substantial withdrawals as those clients look for other places to park their money to avoid having all their money at UBS down the line. As for IB I can see UBS keeping CS's Asian business intact as well, given that CS IB is extremely strong in SE Asia whereas UBS IB is relatively weak in SE Asia (while strong in China/HK).
What's anti-trust?
Regulation to prevent monopolies from forming or companies with too large of a market share that they can single handedly influence the market.
Snb might as well nationalize it at this point.
Does this affect the Klein-First Boston carve out deal?
Almost certainly not happening anymore
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