The payment will include $5.5 billion in cash
and 44 million US Bancorp shares, or a 2.9% stake, that will
allow it to forge a capital alliance with the Japan's biggest
lender, the banks said in a press release. The deal is expected
to close by the end of June next year, they added.
Bloomberg reported the possible sale of MUFG Union Bank last
week - a move that would mark a significant strategy shift for a
lender that has had a presence in the United States for decades,
but has recently said it wants to focus more on Asia.
Japanese banks, including MUFG, have looked to expand overseas
in a bid to boost profits because ultra-low interest rates and a
shrinking population in Japan have made it difficult to increase
earnings at home.
MUFG Union Bank had around 300 branches as of the end of last
year, with most of those retail branches on the West Coast of
the United States, its website shows.
With assets of $132 billion, it provides corporate, commercial
and retail banking as well as wealth management. It became a
wholly owned unit of Mitsubishi UFJ in 2008, when the Japanese
lender paid around $3.5 billion for the third it did not already
control.
MUFG Union Bank will keep its corporate and investment banking
business and some administrative operations.
Japanese parent MUFG also owns a fifth of Wall Street investment
bank Morgan Stanley.
($1 = 109.5700 yen)
(Reporting by Tokyo Newsroom; Editing by Muralikumar
Anantharaman, Louise Heavens and Pravin Char)
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