U.S. Bancorp Gains on Snapping Up MUFG Union Bank’s Retail Business
By Dhirendra Tripathi
Investing.com – U.S. Bancorp stock (NYSE:USB) traded 2.5% higher Tuesday as it agreed to acquire MUFG Union Bank’s core retail banking operations from Japan’s Mitsubishi UFJ Financial Group (NYSE:MUFG) to expand its presence on the West Coast.
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.
Upon close of the transaction, MUFG will hold a 2.9% stake in the American bank. The transaction excludes the purchase of MUFG Union Bank’s global corporate&investment bank, certain middle and back-office functions, and other assets, a note by U.S. Bancorp said.
The acquisition will give U.S. Bancorp another 1 million 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.
U.S. Bancorp said the transaction will boost earnings 6% in 2023 and that it expects to incur merger charges of $1.2 billion. The transaction is expected to close in the first half of 2022, the bank said.
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