Mitsubishi UFJ Financial Group (MUFG) announces it has entered into a share purchase agreement with U.S Bancorp (USB), to sell its core banking subsidiary MUFG Union Bank (MUB).
MUB, owned through MUFG Americas Holdings Corporation (MUAH), is expected to see its shares pass onto USB during the first quarter of 2022 in an US$8 billion sale. The deal includes US$5.5 billion in cash and US$2.5 billion worth of shares.
As part of the consideration for the share transfer, MUFG and MUFG Bank will receive 2.9 per cent of USB’s outstanding shares and will engage in discussions with USB on further business alliances.
MUFG will aim to achieve new growth through the share ownership and business alliance with USB, as well as the concentration of management resources on corporate transactions that can leverage MUFG’s strengths.
According to MUB, its current business environment, including the need for increased technology investments as part of digital transformation, a certain scale is required to maintain and strengthen competitiveness.
Under these circumstances, the firm concluded that transferring MUB to USB was the most appropriate decision that will enable the delivery of higher-quality financial services to customers and communities and provide a better opportunity to unlock the potential value of MUB’s franchise.
