U.S. Bancorp has announced plans to purchase Californian bank Union Bank for $8 billion. Here are all the details of the proposed merger, which is still subject to approval from financial authorities:
U.S. Bancorp to Purchase Union Bank for $8 Billion
U.S. Bank is seeking to strengthen its position as one of the largest banks in the United States with the acquisition of MUFG Union Bank. The news, announced in a press release, states the banking giant will “acquire MUFG Union Bank’s core regional banking franchise from Mitsubishi UFJ Financial Group.”
The deal, subject to regulatory approval, is expected to cost U.S. Bancorp approximately $8 billion. The purchase will include $5.5 billion in cash and approximately 44 million shares of U.S. Bancorp common stock.
U.S. Bank Expanding Its West Coast Portfolio
Union Bank is the West Coast banking subsidiary of Mitsubishi UFJ Financial Group (MUFG Bank). The bank began as the Bank of California in 1864 and operated under that name for more than a century. In 1996 the bank altered its name to Union Bank of California. In 2008 the bank adopted its current name, Union Bank (sometimes stylized UnionBank).
U.S. Bank is using the acquisition of Union Bank to increase its foothold in California and other West Coast markets. U.S. Bank will gain over one million consumers and 190,000 small business customers on the West Coast, making U.S. Bank’s California deposits rise from tenth-largest to fifth-largest bank in the state. Union Bank had more than $150 billion in total deposits as of 2020.
“Putting Customers and Communities First”
“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, in a press release announcing the acquisition.
“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, he added.”
“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,” added Kevin Cronin, MUFG Regional Executive for the Americas and CEO of MUFG Americas Holdings Corporation and MUFG Union Bank, NA.
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