Credit Suisse to Acquire The Klein Group LLC, Add Michael Klein to Its Executive Board

Credit Suisse Group AG (Credit Suisse) announced today that it has taken further important steps to progress the carveout of CS First Boston as a distinct, leading independent capital markets and competitive advisory led business through the acquisition of The Klein Group LLC ("MK&C"), the investment banking business and registered broker-dealer of M. Klein & Company LLC, for a purchase price of USD 175 million. 

The seller will receive equity in CS First Boston in the form of a convertible note. In addition, Michael Klein has been appointed Chief Executive Officer (CEO) of Banking and CEO of the Americas, as well as designated CEO of CS First Boston. He will join the Executive Board and report directly to Group CEO Ulrich Körner.

Michael Klein is an experienced investment banker and financial industry leader with an established track record of building leading advisory and capital raising firms, including MK&C, with over 35 years of investment-banking and strategic-advisory experience. 

In October 2022, Michael Klein stepped down from the Credit Suisse Board of Directors, which he joined in 2018. He was previously CEO of Citigroup's institutional businesses, where he was responsible for the bank's corporate, institutional and government businesses, including corporate banking, transaction services, corporate lending, advisory, debt and equity underwriting, and alternative asset management activities. Under his leadership, the firm grew organically and, through mergers he initiated or executed, contributed to the building of a top tier firm in mergers and acquisitions and capital raising globally.

To align interests with Credit Suisse, M. Klein & Company LLC (the seller), will receive a convertible note and a warrant. The note will provide annual payments and convert into, and the warrant entitles the seller to subscribe to, CS First Boston shares at a qualified initial public offering or other liquidity event, at the then-valuation of CS First Boston, less a customary discount. 

The transaction is expected to have a limited effect on Credit Suisse Group's CET1 ratio of less than 10 basis points. Deutsche Bank AG, London Branch, has provided a fairness opinion to the Board of Directors of Credit Suisse Group AG in connection with the acquisition.

Following the acquisition's closing, MK&C is expected to be fully integrated into CS First Boston. Credit Suisse will retain control over the ultimate scope and structure of CS First Boston, including options to attract third-party capital in the future, as announced at the bank's Strategy Update on October 27, 2022.

Michael Klein's appointment to the Credit Suisse Executive Board and Credit Suisse's acquisition of MK&C are subject to regulatory approvals, with the transaction expected to close in the first half of 2023.