UBS Looks to Acquire Full Ownership of China Platform by Swapping with Credit Suisse Stake

UBS is reportedly in discussions to acquire the remaining 33% stake in UBS Securities in China from Beijing State-Owned Assets Management by exchanging its stake in Credit Suisse Securities (China) with a Beijing government investment fund, according to a Bloomberg News report on Monday.

The proposed deal involves UBS buying the outstanding stake in UBS Securities and potentially divesting its entire 51% holding in Credit Suisse Securities (China) as part of the arrangement, as per sources familiar with the matter cited in the report.

Reportedly, UBS is seeking approximately 2 billion yuan ($277 million) for Credit Suisse’s China unit, which includes the stake currently held by its local partner.

There has been no immediate response from Beijing State-Owned Assets Management regarding the reported deal, while UBS has chosen not to comment on the matter.

The latest proposal introduces a new development to the ongoing bidding process for Credit Suisse’s investment bank in China. Despite UBS’s interest in acquiring full control of the UBS Securities unit, the reluctance of the Beijing government to sell can be attributed to the growth and earnings potential of the entity, as per the report.

In the midst of negotiations, UBS is pursuing discussions with its state-owned shareholder to swap shares while simultaneously engaging in advanced talks to sell Credit Suisse Securities to Citadel Securities.

The takeover of Credit Suisse by UBS, which stands as the most significant bank merger since the 2008 global financial crisis, was arranged swiftly last year by Swiss authorities to prevent a potential collapse of Credit Suisse. This merger led to UBS owning two majority-owned securities firms in China, a scenario which typically restricts a company from operating more than one entity in the country.