The deal, aimed at stemming a crisis of confidence that threatened to spread to global financial markets, came after a hectic day of negotiations between the two lenders.
The two largest banks of the rich alpine Nation famous for its prominence in the banking sector held negotiations involving the government, central bank and financial regulators all weekend.
A deal value was not immediately clear. A Financial Times report previously put it at more than $2 billion.
Swiss regulators were forced to step in and orchestrate an agreement to prevent a crisis of confidence in Credit Suisse from spilling over into the broader financial system.
The Swiss finance minister said the bankruptcy of a major global bank had irreparable consequences for the financial markets.
It was not yet clear if the deal would be enough to restore confidence in lenders around the world. The first hint could come when stock markets open in a few hours in Asia, Australia and New Zealand.
The Swiss central bank will inject significant liquidity into the merged bank, it was said at a press conference in the Swiss capital Bern. The deal includes 100 billion Swiss francs (108 billion US dollars) in liquidity support for UBS and Credit Suisse.
“With the takeover of Credit Suisse by UBS, a solution was found to ensure financial stability and to protect the Swiss economy in this exceptional situation,” the Swiss central bank announced.
(With contributions from agencies)
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