UBS's Acquisition of Credit Suisse: Case Study of Acquisition Results between Large Banks

Abstract

UBS's acquisition of Credit Suisse is a typical case of acquisitions between large banks, which has a great influence on the development of UBS itself and the Swiss banking industry. This paper aims to evaluate the success of the acquisition based on the changes in UBS’s stock price at the time of the acquisition news announcement and the actual occurrence of the acquisition. Through the study of UBS’s stock price fluctuations before and after the release of acquisition news, this paper finds that investors generally hold a positive attitude toward the impact of the acquisition on UBS's operation and future revenues. Through analysis of the stock price and owners' equity per share changes during the acquisition, it can be indicated that the income of UBS also increased significantly after the actual occurrence of the acquisition, which is confirmed by both the positive reaction of market investors and UBS's financial statements. The generally upward indicators such as stock price, return on stocks, and owners 'equity reflect the overall positive financial information of UBS, therefore UBS's acquisition can be considered successful to a large extent. According to this acquisition case, the acquisition is a significant means for large banks to enhance market investors' optimism about them, as well as reduce their operating costs and increase future revenues.