UBS Group AG is looking to secure up to $6 billion in government guarantees as it contemplates a potential takeover of Credit Suisse Group AG, Reuters reported on Saturday. This comes after Credit Suisse was hit by a mounting debt crisis.
According to several sources, the government guarantees would be used to cover potential litigation charges as well as winding down certain parts of the bank. Swiss regulators are hoping to resolve the bank’s issue before markets open on Monday.
Currently valued at approximately $8 billion, Credit Suisse may have to axe as many as 10,000 jobs if it combines with UBS in a takeover deal. Talks between representatives of UBS and Credit Suisse are ongoing, with several strategies still under consideration.
Joining UBS in a race to acquire Credit Suisse Group AG is Deutsche Bank, several sources have revealed. Any potential deal with the German bank will take longer than one with UBS, however.
“Any potential deal will be littered with complexity, litigation protections being one, with the situation to remain fluid but with clarity necessary before Monday,” Thomas Hallett, a KBW analysts wrote to clients on Saturday.