What Is The Merger Of Union Bank Of Switzerland And Swiss Bank

The merge of Union Bank of Switzerland and Swiss Bank Corporation is sought out for the best interest for both financial servicing companies. The general motives for the merger is to attain global leadership, develop the leading edge in Swiss consumer and corporate banking, create substantial shareholder value, exploit an excellent cultural fit, create a sustainable position for a leading Swiss financial institution and create a base for the next step to establish a meaningful position in U.S. investment banking.
The anticipation of the merge is synergy value created in the amount of CHF 20-25 billion. The detail of the sources of the synergy value is concentrated through costs savings, accelerated revenue growth and redeployment of excess capital. Cost savings of CHF 3.5 billion per year are expected due to elimination of duplicate activities in areas such as operations, infrastructure, trading rooms, Swiss branch networks, and corporate staff. To evaluate this, exhibit 17 states the cost savings are realizable within 3-4 years of the merger and represents 22% of the current combined cost base of ex-UBS and SBC.
Accelerated revenue …show more content…
When one considers the growth and internationalization of other banks, a merger of this magnitude was required for the sustainability of UBS. The global market was expanding rapidly and competitors were aggressively seeking to develop across country borders. Furthermore, the prominent position held by staff of ex-UBS in the management of the post-merger UBS AG, the financial strength of the new brand, and the power in the investment banking sector of the brand are additional reasons for our vote in favor of the merger. It is our view that the merger was a proactive decision to avoid "last resort" actions. This merger placed both organizations in the position of power and growth to capture the expanding international