US Bancorp Acquires MUFG Union Bank Regional Franchise For $8 Billion In Cash And Shares Of Mitsubishi UFJ

Shares of Mitsubishi UFJ Financial Group Inc. MUFG,
+2.10%
rose 4.6% in premarket trading Tuesday, after US Bancorp USB,
+0.88%
announced an agreement to buy MUFG Union Bank’s regional banking franchise from Mitsubishi UFJ in an $8 billion cash and stock deal. US Bancorp shares were quoted nearly 1% higher than the opening. Under the terms of the deal, US Bancorp will pay $5.5 billion in cash and issue 44 million shares of common stock. Following the closing of the deal, which is expected to close in the first half of 2022, Mitsubishi UFJ will own a 2.9% stake in US Bancorp. and back office functions and some other assets. . With the deal, US Bancorp will acquire more than 1 million consumer customers and approximately 190,000 West Coast small business owners, as well as approximately $58 billion in loans and $90 billion in deposits. US Bancorp expects to realize approximately $900 million in synergies from the deal, while incurring merger costs of $1.2 billion. Shares of US Bancorp are up 19.5% through Monday and Mitsubishi UFJ shares are up 28.9%, while the SPDR Financial Select Sector ETF XLF,
+0.44%
is up 24.0% and the S&P 500 SPX,
+0.39%
won 16.0%.

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