UBS buys Credit Suisse for over US$2 billion to avoid collapse.

InfoMoney - UBS has agreed to buy Credit Suisse after increasing its offer to more than $2 billion, with Swiss authorities prepared to change the country's laws to circumvent a shareholder vote on the transaction as they race to finalize a deal before Monday, according to the Financial Times.

This morning, the newspaper had already reported on a A proposal of up to US$1 billion for the deal.However, Bloomberg later stated that the struggling bank disagreed with the proposal, deeming it too low, and had the support of its main shareholder, Saudi National Bank, in rejecting the deal.

Meanwhile, Dow Jones reported that the Swiss National Bank offered UBS approximately $100 billion in liquidity to help it take over Credit Suisse's operations. Further details about the liquidity offer were not provided.

>>> Credit Suisse shares surge more than 20% on the Zurich Stock Exchange after receiving support from the Swiss central bank.

With the new valuation, UBS will now pay more than 0,50 Swiss francs per share, using its own shares, a value that is still well below Credit Suisse's closing price of 1,86 Swiss francs on Friday, valuing the bank at 7,4 billion Swiss francs.

UBS also agreed to ease a clause that would void the deal if its loan default spreads increased, the FT sources added.

The government is preparing emergency measures to accelerate the acquisition and plans to introduce legislation that will bypass the normal six-week consultation period required for UBS shareholders so that the deal can be sealed immediately. Some sources, however, have criticized this plan.

The structure of the agreement was designed by Swiss regulators to provide stability to the country's banking system. Swiss authorities have already secured pre-approval from regulators in the US and Europe, who are expected to issue statements later today, according to the Financial Times.

UBS will drastically shrink Credit Suisse's investment banking arm, so that the combined entity will represent no more than a third of the resulting group after the merger, two of the sources said.