UBS acquires Credit Suisse. The Swiss financial holding company will buy out its competitor Credit Suisse. The press-release says that under the terms of the deal UBS will pay with its shares at the scheme of one UBS share for 22.48 Credit Suisse shares. That ratio assumes that the entire bank was valued at 3 billion francs ($3.2 billion) in the transaction, the statement said.

That’s less than half of the bank’s market value at Friday’s close of 7.4 billion francs, or nearly $8 billion.

The merger, which is expected to be completed this year, will be done without shareholder approval procedures for both banks, the bank said. The deal assumes substantial government support. The government agreed to give UBS a government guarantee to cover potential losses of 9 billion francs ($ 9.7 billion) under a number of conditions. The National Bank, in turn, offered UBS 100 billion francs ($108 billion) to make up its liquidity.

UBS announced the takeover of Credit Suisse

Merger talks began this week amid a series of problems. Last month, the bank reported its biggest annual loss since the global financial crisis and said its customers withdrew more than 110 billion Swiss francs from their accounts in the fourth quarter.

The problems worsened in March, with the bank admitting “significant deficiencies” in its financial disclosure for the previous two years on March 14, and its largest shareholder, Saudi National Bank, saying it was not ready to inject new capital into the bank. The stock has since fallen to a record low. The bank announced plans to borrow $54 billion from the Central Bank “to proactively strengthen its liquidity,” but that didn’t remedy the situation. Deposit outflows at the end of last week exceeded 10 billion francs a day.

The takeover of rival UBS was pushed by the authorities. UBS offered to buy the troubled bank for $1 billion, but Credit Suisse rejected the offer, as it considered that the amount offered was too small, and such a deal would be harmful to shareholders and employees.

After that, the authorities are considering a full nationalization or transfer to the state ownership of a significant block of shares. UBS later agreed to pay more than $2 billion.

Note the volatility throughout the stock market, including the S&P 500.

Earlier we reported that Swiss regulators said the Central Bank is ready to intervene in the situation with Credit Suisse.