UBS Group AG pulled off one of the biggest bank deals ever in a matter of days

When Colm Kelleher became chairman last April, he inherited feasibility studies by predecessor Axel Weber dating back to at least 2020 on what a takeover of Credit Suisse Group AG would look like. And earlier this year, after clients pulled tens of billions of dollars from the Paradeplatz neighbor, Kelleher called on a small group of top advisers from his alma mater Morgan Stanley to ramp up contingency planning, according to people with direct knowledge of the matter.

The project was top secret and few at the US bank knew what their senior mergers and financial services colleagues were working on with a tight circle of UBS executives, said the people, who asked not to be identified discussing the extent of the preparations. Those efforts meant that in mid-March, as a crisis of confidence that started in US regional banking spread to Switzerland, UBS was ready to go.

On March 15, when Credit Suisse received a lifeline from the Swiss central bank, its crosstown rival quickly turned from war gaming to execution. UBS called on the Morgan Stanley advisers and bankers at JPMorgan Chase & Co., some of whom jetted down to Zurich and signed non-disclosure agreements.

What followed was round-the-clock negotiations on the decisive weekend that saw some advisers working on just three hours of sleep and without showers. That produced a rescue deal that wiped out some bondholders, trampled on traditional shareholder rights, heightened too-big-to-fail concerns and enraged the Swiss public — but managed to stave off an even bigger global crisis.