It's an $8 billion deal
After a decade of waiting, US Bancorp has agreed to purchase MUFG Union Bank, the US unit of Japan’s Mitsubishi UFJ Financial, for $8 billion – solidifying US Bank’s position as the fifth-largest regional bank by assets.
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US Bancorp will buy MUFG Union Bank’s core regional banking franchise in an $8 billion cash-and-stock deal intended to bolster US Bancorp’s presence in California, Washington, and Oregon.
The takeover, which includes $5.5 billion in cash and 44 million shares of US Bancorp, will give MUFG a 2.9% minority stake in the Minneapolis-based bank. Additionally, US Bank will gain more than one million customers and about 190,000 small business customers on the West Coast once the deal is sealed. It also gets $58 billion in loans and $90 billion in deposits based on MUFG Union Bank’s June 30 balance sheet.
“The acquisition of MUFG Union Bank underscores our commitment to strengthen and grow our business on the West Coast, make investments to serve customers and local communities and enhance competition in the financial services industry,” US Bancorp CEO Andy Cecere said in a statement.
US Bank will retain all of MUFG Union Bank’s front-line employees. It expects the transaction to be 6% accretive to earnings per share in 2023 and 8% accretive to earnings when fully integrated.
“We are very pleased to have reached this agreement which will allow MUFG to focus and increase our resources on accelerating growth in our Americas wholesale businesses – specifically our corporate and investment banking, global markets, Japanese corporate banking and transaction banking businesses,” said Kevin Cronin, MUFG regional executive for the Americas and CEO of MUFG Americas Holdings and MUFG Union Bank.
The merger is expected to close in the first half of 2022, according to MUFG Union Bank’s Press release.
