UBS-Credit Suisse merger: a path to value creation?

Abstract

This thesis uses MacKinlay's event research method to investigate the short-term value creation induced by UBS-Credit Suisse deal in Switzerland. The study is divided into three chapters: a literature review on Mergers and Acquisitions (M&As), an examination of the prelude to the transaction, and the empirical analysis which includes a Monte Carlo simulation in R for assessing different paths of the UBS stock price reaction. The event study results show a short-term value loss of about 18 billion CHF. This means that market has reacted negatively to this announcement. The findings align with existing market information and sentiment regarding the transaction, highlighting potential concerns and uncertainties surrounding the integration of two financial giants. The empirical analysis casts light on the instant financial implications of a UBS-CS merger and enriches the M&A literature in banking.