MUFG agreed to sell the core regional banking business of MUFG Union Bank, with about 300 branches in California, Washington and Oregon, to U.S. Bancorp for $5.5 billion in cash and about 44 million U.S. Bancorp shares, worth about $8 billion in total. MUFG became a shareholder of about 2.9% of U.S. Bancorp and kept its corporate and investment banking business in the US. The deal On September 21, 2021, U.S. Bancorp agreed to buy MUFG Union Bank's core regional banking franchise from MUFG Americas Holdings. It paid $5.5 billion in cash and about 44 million of its own shares, for a total of about $8 billion. The business had about $105 billion of assets, $58 billion of loans and $90 billion of deposits, and about 300 branches, mostly in California. The price was about 1.3 times the business's tangible book value. What MUFG kept MUFG kept its US corporate and investment banking, global markets and some other operations, which it moved into a new structure in the US. Through the share payment, MUFG became a holder of about 2.9% of U.S. Bancorp, and the two banks agreed to work together in areas such as payments. Why it happened Union Bank, a California bank that the Bank of Tokyo first bought into in the 1980s, had low profits compared with US rivals because of high costs and low interest rates. MUFG decided its money would earn more in corporate banking and in Asia. For U.S. Bancorp, the deal gave it a large branch network on the West Coast, especially in California, where it had been small. Approvals and timeline The deal was expected to close in the first half of 2022 but waited for US bank regulators, who were taking longer to review bank mergers. Approval came in October 2022, and the deal completed on December 1, 2022.
