Benzinga | Sep 21, 2021 06:06AM EDT

US Bancorp To Acquire MUFG Union Bank For ~$8B

U.S. Bancorp (NYSE:USB) today announced that it has entered into a definitive agreement to acquire MUFG Union Bank's core regional banking franchise from Mitsubishi UFJ Financial Group (NYSE:MUFG) in a transaction that will bring together two premier organizations with a focus on being the leader in serving customers and communities in California, Washington and Oregon.

Under the terms of the agreement, U.S, Bancorp will purchase MUFG Union Bank for approximately $8 billion, including $5.5 billion in cash and approximately 44 million shares of U.S. Bancorp common stock.1 Upon close of the transaction, MUFG will hold a minority stake of approximately 2.9% in U.S. Bancorp. The transaction excludes the purchase of MUFG Union Bank's Global Corporate & Investment Bank, certain middle and back office functions, and other assets.

With the acquisition, U.S. Bank will gain more than 1 million loyal consumer customers and about 190,000 small business customers on the West Coast in addition to approximately $58 billion in loans and $90 billion in deposits based on MUFG Union Bank's June 30, 2021 balance sheet. The combination will improve U.S. Bank's deposit position in California from 10th to 5th and will significantly increase its customer base in California.

This increased scale will make the U.S. Bank brand a stronger player in these markets, which will increase competition with California's three largest banks. This will provide benefits for both customers and the communities served by the combined organization through improved technology, products and customer choice.

"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. With MUFG Union Bank, we will increase access to state-of-the-art financial products while maintaining U.S. Bank's strong track record of putting its customers and communities first. We are also committed to maintaining both organizations' excellent records of serving low-income communities and supporting minority-led institutions," said Andy Cecere, chairman, president and chief executive officer of U.S. Bancorp. "We have a great deal of respect for the MUFG Union Bank team and share customer-centric and relationship-based strategies and cultures based on integrity. We look forward to welcoming MUFG Union Bank to the U.S. Bancorp family."

"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 Corporation and MUFG Union Bank, N.A.