Over the weekend, Swiss banking giant UBS Group agreed to buy its rival Credit Suisse for 3B Swiss francs ($3.2B). The deal was encouraged by Swiss authorities after Credit Suisse said it would borrow up to 50B Swiss francs ($54B) from the Swiss National Bank under a covered loan facility and a short-term liquidity facility. More: - Credit Suisse Chairman Axel Lehmann said recent bank troubles in the U.S. accelerated customers’ loss of trust in Credit Suisse.
- Lehmann added that the bank could not continue to exist in its current form.
- According to sources, customers withdrew about $10B daily in the week following U.S.-based Silicon Valley Bank’s collapse.
- Swiss regulators were concerned that Credit Suisse’s failure would make Switzerland a new source of contagion for global stress.
- Hours following the UBS-Credit Suisse deal, a group of central banks, including the U.S. Federal Reserve, the Bank of England, the Bank of Japan, and the Bank of Canada, announced an expansion in the frequency of dollar swap line operations.
In related news: - On Monday, Credit Suisse bondholders protested the UBS deal, and the European Central Bank warned that that deal would wipe out $17B of Credit Suisse’s bonds.
- The ECB said the deal went against debt recovery norms and undermined confidence in the financial market.
- Under the UBS-Credit Suisse purchase agreement, AT1 bondholders would receive nothing, while Credit Suisse shareholders would get 3B Swiss francs ($3.2B).
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U.S. big banks are discussing ways they can support embattled First Republic Bank. JPMorgan Chase CEO Jamie Dimon is leading the talks. Options being discussed include the large banks making a capital investment into First Republic. First Republic shares fell 47% on Monday, trading as low as $11.52. More: - First Republic Bank consumers have withdrawn more than $70B from the bank since the collapse of Silicon Valley Bank on March 10.
- Last week 11 banks, including JPMorgan Chase, Citigroup, Bank of America, Wells Fargo, and Morgan Stanley, agreed to deposit a combined $30B into First Republic.
- The large banks received billions of dollars in deposits from midsize banks, including First Republic, in the week following SVB’s sudden collapse.
- According to sources, JPMorgan is advising First Republic on strategic alternatives, including a capital raise or a possible sale.
- First Republic shares are down more than 90% since the beginning of March.
- On Sunday, credit rating company S&P Global Ratings cut First Republic’s crediting rating from BB+ to B+.
- The bank’s rating remains on CreditWatch Negative.
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Amazon plans to lay off an additional 9,000 corporate workers across the company in the coming weeks. This new round of layoffs comes after the company announced in November it would cut 18,000 corporate jobs. The initial round of layoffs began in November and extended into January. More: - Amazon’s first round of layoffs primarily affected workers in the company’s retail, devices, recruiting, and human resources teams.
- In a companywide memo released on Monday, CEO Andy Jassy pointed to uncertainty in the economy and uncertainty about the near future.
- The latest layoffs would mainly impact Amazon’s AWS, PXT, Advertising, and Twitch teams.
- Twitch CEO Dan Clancy said about 400 people would be laid off from the team as part of the latest round of cuts.
- The recent layoffs are the largest in Amazon’s nearly 30 years of operations.
- As of Dec. 31, Amazon had 1.5 million employees globally, including 350,000 corporate workers.
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New Starbucks CEO Laxman Narasimhan officially took over the reins on Monday, nearly two weeks before his previously announced official start date of April 1. Narasimhan is succeeding interim CEO Howard Schultz, who returned to serve as CEO in March 2022 as the coffee chain was battling unionization efforts. More: - Narasimhan was the former CEO of U.K.-based consumer-products company Reckitt Benckiser Group.
- He joined Starbucks in September 2022 and worked alongside Schultz, learning Starbucks’ culture and operations.
- In the last 18 months, pro-union Starbucks employees have been pushing to organize, saying it was necessary to secure better pay and working conditions.
- The National Labor Relations (NLRB) Board has certified unions at 288 Starbucks locations.
- The coffee chain has about 9,300 locations in the U.S.
- The NLRB has accused Starbucks of breaking federal law in its efforts to prevent its employees from organizing.
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Microsoft plans to launch its own app store for games on iPhones and Android smartphones next year, pending the approval of its planned $75B Activision Blizzard acquisition. Under the EU’s Digital Markets Act, Apple and Google must open their mobile platforms to app stores owned and operated by other companies. More: - The new requirement goes into effect in March 2024.
- Microsoft Gaming CEO Phil Spencer noted that the company wanted to be able to offer Xbox and other content from third-party partners across any screen.
- Microsoft has been trying to convince regulators in the U.S., Europe, and the U.K. to approve its purchase of “Call of Duty” maker Activision Blizzard.
- Regulators fear that the tie-up would harm competition.
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Virgin Orbit has been talking with potential investors to raise fresh capital and avoid bankruptcy. The space company paused operations last week and furloughed most of its workers while it seeks new investment or a potential buyout. More: - According to sources, Virgin’s leadership team held daily talks with interested parties throughout the weekend.
- CEO Dan Hart told employees during an all-hands meeting last week that the company hoped to have an update for employees by Wednesday.
- According to sources, a potential buyer balked at a proposed sale price of about $200M, just below Virgin’s Friday market cap.
- Virgin stock fell more than 19% on Monday, closing at 52 cents a share.
- The company is down ~71% YTD.
- The company is preparing for a possible bankruptcy filing as early as this week.
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- President Biden issued his first veto on Monday, rejecting a resolution that prevents the Labor Department from allowing certain retirement plans to weigh environmental, social, and corporate governance factors when selecting investments.
- Chinese President Xi Jinping arrived in Moscow on Monday for a three-day visit with Russian President Vladimir Putin.
- Rupert Murdoch announced he is engaged to be married for the fifth time, eight months after he finalized his fourth divorce. Murdoch, 92, is engaged to Ann Lesley Smith, 66. The couple plans to tie the knot later this summer.
- French President Emmanuel Macron's government survived a no-confidence vote in the National Assembly on Monday. The vote was nine votes short of a majority. The move comes after Macron pushed through his plan to raise the official retirement age from 62 to 64.
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 |  | Vanessa Omeokachie writes the daily Inside Business newsletter. Her interests include finance, technology, and entrepreneurship. In her free time, she enjoys reading, hiking, attending concerts and music festivals, traveling, and exploring. Connect with her on Twitter @VanessaOmeo or on LinkedIn. |   | | Editor | Aaron Crutchfield is based in the high desert of California. Over the last two decades, he has spent time writing and editing at various local newspapers and defense contractors in California. When he's not working, he can often be found looking at the latest memes with his kids or working on his 1962 and 1972 Fords. | |
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