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The value that shareholders will receive for each title is significantly less than its final price, so the manager of the competitiveness ranking doubts whether the shareholders will accept the deal.
“Switzerland will never be the same again“. The teacher shows such frankness Arturo Bris In an article for the International Institute for Management Development, or IMD, one of the most important business schools in the world, whose campus is located in Lausanne, Switzerland. And this weekend was a “huge loss of fortune” in his eyes, with the acquisition of Credit Suisse by rival UBS. Because the shareholders of the acquired bank will receive 0.76 Swiss francs per share. a much lower value From 1.86 Swiss francs at the close of the session on Friday.
“Credit Suisse Group’s largest shareholders they won’t accept the deal“, he continues. Neither are the Swiss pension funds, which own a large number of shares. He also doubts that the deal will eventually be satisfactory for UBS. Because the costs and “risks” of the operation are left to its customers, depositors and shareholders.
On the other hand, he argues that the cost of the bailout is fully borne by Swiss taxpayers. Also, keep in mind that the future of the 16,000 employees working in the Swiss retail network is in the air, as the Credit Suisse branch is right in front of the UBS branch, so either one will probably close. And there will be “significant losses” in the asset management arms of both banks. The reputation of Swiss banks was irreparably “damaged” by all this.large numbers of customers and depositors will leave both banks, Bris predicts.
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The result of this crisis is a large bank with “almost monopoly” power in some segments of Swiss markets, which is not at all desirable for customers. And that would be very expensive, because in addition to the liquidity injection of 100,000 million francs, you have to factor in potential business loss and restructuring costs, among other things.
While he values the speed of Swiss authorities to avoid a runaway banking crisis, he doubts whether the merger will finally work. “They almost never do,” he warns. “Now a larger, slower moving creature‘, so ‘we must remain cautious,’ he concludes.