Korea's antitrust regulator approves takeover of Credit Suisse by UBS

The logos of the Swiss banks Credit Suisse and UBS are displayed at Paradeplatz in Zurich, Switzerland, March 19. AP-Yonhap

Korea's antitrust regulator on Thursday approved UBS Group's takeover of Credit Suisse Group, noting the merger is not likely to limit competition in the local market.

The review came as overseas companies that generate sales of 30 billion won ($22.47 million) in Korea are obligated to report their mergers to the regulator. UBS and Credit Suisse are both based in Switzerland.

"Following the review process, we have concluded that the move is not likely to restrict competition in the market in all types of mergers," the Fair Trade Commission (FTC) said in a statement.

The FTC had been looking into the impact of vertical and horizontal mergers in businesses ranging from brokerage and acquisition advisory to debt capital market and asset management.

"All four areas where the horizontal merger is set to occur are already participated in by numerous players that engage in intense competition," the FTC said. "Even after the merger, UBS and Credit Suisse are not likely to raise prices, as their shares are small."

The regulator added the two investment banks also do not hold enough market presence in Korea to disturb the operations of other rivals.

The merger between the two investment banks has been executed with the support of the Swiss government, prompted by concerns that a potential collapse of Credit Suisse could send a shockwave through the global financial market.

Antitrust regulators of other countries, including the United States, Canada, Japan and Brazil, also have approved the deal. The European Union is still reviewing the merger.

UBS currently operates in Korea through UBS Securities Pte. Ltd., Seoul Branch, along with UBS Hana Asset Management under ties with the Seoul-based Hana Bank. Credit Suisse also has two offices in the country.

"We have reached the conclusion promptly to prevent overseas uncertainties from weighing down the local financial market," the FTC said. (Yonhap)