Banking giant UBS Group AG has agreed to acquire Credit Suisse Group AG – which is navigating tricky waters at this time – in a historic deal to put a halt to yet another banking crisis. According to media reports, UBS will acquire its rival for a total of 3 billion Swiss francs ($3.23 billion) in the government-brokered deal.

Swiss president Alain Berset announced that the development was “one of great breadth for the stability of international finance,” and that “an uncontrolled collapse of Credit Suisse would lead to incalculable consequences for the country and the international financial system.” UBS’s agreement to buy Credit Suisse also marks the success of Swiss authorities to persuade UBS Group to buy the crisis-hit Credit Suisse. This development comes on the heels of the failure of two major banks in the US last week – Silicon Valley Bank (SVB) and Signature Bank – which shook investor confidence and left Wall Street and global financial markets on edge since then. At the least, the deal will address a massive rout in Credit Suisse stock and bonds.

With the acquisition, UBS will assume up to $5.4 billion in losses. For now, there are still details that need to be hammered out, and the deal is expected to be closed by the end of the year. “It’s a historic day in Switzerland, and a day frankly, we hoped, would not come,” UBS Chair Colm Kelleher told analysts on a conference call. “I would like to make it clear that while we did not initiate discussions, we believe that this transaction is financially attractive for UBS shareholders,” Kelleher added.

Under the terms of the deal, the shareholders of the 167-year-old Credit Suisse will receive one share of UBS for every 22.48 Credit Suisse shares they hold. Kelleher called the deal an “attractive” one for UBS shareholders, even though it was nothing short of an “emergency rescue” for Credit Suisse. Once the takeover is complete, the combined banking entity will have a total of $5 trillion of invested assets.

“With the takeover of Credit Suisse by UBS, a solution has been found to secure financial stability and protect the Swiss economy in this exceptional situation,” read a statement from the Swiss National Bank. It has pledged a loan of up to 100 billion Swiss francs ($108 billion) to support the takeover, while the Swiss government granted a guarantee to assume losses up to 9 billion Swiss francs from certain assets over a preset threshold “in order to reduce any risks for UBS.”

Calling it an emergency rescue seems appropriate, especially since it saw withdrawals in the billions in a very short period of time. A combination of falling customer confidence, divisive management, and other factors saw what was once one of the world’s globally systemic important banks enter a crisis wherein its shares went into free fall and even a statement of confidence from the Swiss National Bank could not come to its rescue. In fact, Credit Suisse’s shares lost a quarter of their value last week, and it was forced to tap $54 billion in central bank funding.

It is thus unsurprising that the acquisition by UBS will have a major impact on the startup ecosystem in Switzerland and beyond. Credit Suisse is often counted among the 30 global banks with systemic importance, thus having influence and impact as long as within Asia and even beyond. In Switzerland, Credit Suisse has been a major player in this space, supporting a number of high-growth startups and venture capital firms. Being taken over by UBS could potentially disrupt these relationships and change the dynamics of the startup ecosystem in Switzerland.

This is not to say that the acquisition does not come with potential benefits. In fact, if the deal does manage to put a halt to the banking crisis, then it could benefit the economy as a whole and create a more stable environment for startups to operate in. It could also potentially lead to more competition in the financial sector, which could lead to better pricing and services for startups, along with increased investor confidence and more access to funding and credit, which could fuel innovation and growth.