US Bancorp acquiring MUFG Union Bank for $8 billion

U.S. Bancorp
Signage is displayed at a US Bancorp branch in Louisville, Kentucky, U.S., on Thursday, July 12, 2018. US Bancorp is scheduled to release earnings figures on July 18. Photographer: Luke Sharrett/Bloomberg

US Bancorp announced on Tuesday that it is entering into a definitive agreement to acquire MUFG Union Bank’s core regional banking franchise from the Mitsubishi UFJ Financial Group. The two companies finalized the deal at about $8 billion in cash and stocks!  

This deal is set to boost the U.S. bank’s presence in California and other parts of the west coast. By bringing the two premier organizations together, the agreement focuses on being the leader in serving the customers and the communities in this part of America.   

The Agreement

The terms of the agreement state that U.S. Bancorp will pay MUFG in cash and stocks. Of the $8 billion, $5.5 billion of the money is in cash, while the rest is to be paid by around 44 million shares of the U.S. Bancorp common stocks. Upon the closure of the transaction, MUFG will hold a minority stake of 2.9% in the U.S. Bancorp. However, this transaction excludes purchasing the MUFG Union Bank’s Global Corporate & Investment Bank, middle and back-office functions, and other assets.  

After the successful acquisition, the U.S. Bank will gain around 1 million loyal consumer customers and about 190,000 small business customers on the west coast. This includes $58 billion in loans and $90 billion in deposits (data from the MUFG Union Bank’s June 30, 2021 balance sheet). Thus, this will improve U.S. Bank’s deposit position in California from 10th to 5th, thereby increasing its customer base in California. After the acquisition, U.S. Bancorp will be competing with the top three banks in California.  

With around 70,000 employees and $559 billion of assets is the parent company of the U.S. Bank National Association. Its coalition with MUFG Bank with about 305 branches is a turnaround for both companies. As of now, the monetary transaction has received approval from the two company’s Board of Directors.  

Related Posts