U.S. Bancorp to acquire MUFG Union Bank’s main regional banking franchise for nearly $8 billion in cash and stock, according to a report by The Wall Street Journal on Tuesday.

  • The acquisition deal includes $5.5 billion in cash and around 44 million shares of U.S. Bancorp common stock.  MUFG will hold a minority stake of 2.9% in U.S. Bancorp after the close of the transaction.
  • Both companies stated that they would have a combined presence in California, Washington, and Oregon. Through the deal, U.S. Bank will gain over a million consumer customers and nearly 190,000 small-business customers on the West Coast.
  • U.S. Bancorp expects the transaction to add nearly 6% to per-share earnings in 2023. The deal has an estimated internal rate of return of over 20%. The company also expects to book $1.2 billion in merger charges.

U.S. Bancorp stated that it has integrated regulatory concerns into the deal process and that the order would not restrict the company’s ability to operate and grow its business. USD down -2.33%, MUFG down-2.23%.