MUFG exits US retail banking in USD 8 bln deal

The deal, which includes USD 5.5 billion in cash and USD 2.5 billion in shares, would give Japan’s lender a 2.9% stake in Minneapolis-based US Bancorp. Following the deal, which is expected to close by the end of June 2021, MUFG will focus on corporate and investment banking in the United States through other entities and through its partnership with Morgan Stanley, which is owned by the Japanese bank.

MUB said that to compete it will have to invest heavily in new digital technology to keep pace with larger rivals that offer new online banking services. For US Bancorp, the MUB deal expands its presence in California.

The acquisition is being made at 1.3 times the tangible book value of the MUB, a common indicator used to judge bank mergers, while US Bancorp said it would be looking to integrate the system and make up by a combination of real estate footprint.
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