With the acquisition, U.S. Bancorp will obtain around $58bn in loans, $90bn in deposits, and a customer base of more than one million consumers
US Bank tower in Salt Lake City, Utah. (Credit: Ricardo630/Wikipedia.)
U.S. Bancorp has agreed to acquire MUFG Union Bank, the core banking subsidiary of Japan’s Mitsubishi UFJ (MUFG), for a purchase price of $8bn.
The transaction consideration includes a cash payment of $5.5bn and issuance of 44m shares of US Bancorp common stock.
The deal will not include MUFG Union Bank’s global corporate and investment bank businesses, certain middle and back-office operations, and other assets, said the company.
It is expected to close in the first half of 2022, subject to certain customary closing conditions, including receipt of required regulatory approvals.
Upon closing, MUFG would hold a minority stake of 2.9% in U.S. Bancorp.
With the acquisition, U.S. Bancorp will obtain around $58bn in loans, $90bn in deposits, and a customer base of more than one million consumers.
U.S. Bancorp chairman, president and CEO Andy Cecere said: “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 organisations’ excellent records of serving low-income communities and supporting minority-led institutions.”
In a separate development, MUFG Union Bank has entered into a consent order with the US Office of the Comptroller of the Currency (OCC).
OCC has issued a Cease-and-Desist order against MUFG Union Bank for its non-compliance with the Interagency Guidelines Establishing Information Security Standards.
Also, the agency found that the bank is practising unsafe practices related to its technology and operational risk management.
MUFG Union Bank said that it has started corrective efforts, and is committed to remediating the deficiencies.
The efforts include strengthening Board, technology risk assessment, IT and operational risk governance, operations and internal controls, security, staffing and data management.