FTC clears UBS-Credit Suisse deal

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FTC clears UBS-Credit Suisse deal

Published: 18 May. 2023, 12:00 Updated: 18 May. 2023, 16:50

The logo of Swiss bank UBS is seen in Zurich, Switzerland March 29, 2023. [REUTERS]

Korea’s antitrust regulator gave the green light for the UBS Group’s takeover of Credit Suisse, the regulator said Thursday.

“We’ve approved UBS Group AG’s acquisition of Credit Suisse Group AG with a conclusion their merger and acquisition will not limit competition in the financial investment industry,” the Fair Trade Commission (FTC) said.

UBS, the largest Swiss bank, filed for the merger and acquisition on April 25 after signing the contract on April 6.

Foreign companies that annually raise 30 billion won ($22.5 million) or more in Korea are required to report on takeover deals. UBS runs an asset management business with Hana Bank and a brokerage firm in Seoul. Credit Suisse runs brokerage and investment banking services in its Seoul office.

UBS agreed to buy the smaller rival for around $3.2 billion in March in a deal brokered by the Swiss government after the 166-year-old Credit Suisse came to the brink of collapse amid the banking turmoil.

It was an emergency rescue deal as Credit Suisse had been losing the trust of investors and customers over the past years of weak earnings and “material weakness” in its bookkeeping. The demise of Silicon Valley Bank and Signature Bank further lowered consumer confidence.

The FTC primarily reviewed the deal in services, including brokerage, investment banking and asset management.

“We’ve concluded concerns for limiting competition is little in all types of mergers,” including vertical and horizontal integrations, the FTC said.

A horizontal merger is when firms that sell similar products merge. A vertical merger is the merger of companies that provide different supply chain functions for a common good or service.

The financial watchdog added the competition in the services is already fierce among local players, and the combined market share for UBS and Credit Suisse is low, making it unlikely for the institution to up the price.

The FTC said it sped up the evaluation process for the takeover deal to prevent the spread of risks from overseas into the Korean financial market.

U.S. authorities gave the green light to the deal last month, and the European Union is expected to give unconditional approval for the takeover, according to a Reuters report Wednesday.

BY JIN MIN-JI [jin.minji@joongang.co.kr]