U.S Bancorp announced on Tuesday (Sept. 21) that it will acquire MUFG Union Bank’s regional operations in an $8 billion deal.
The bank said in a news release that the transaction will join the two entities “with a focus on being the leader in serving customers and communities in California, Washington and Oregon.”
The agreement will see U.S. Bancorp purchase MUFG Union Bank from Mitsubishi UFJ Financial Group for $5.5 billion in cash and roughly 44 million shares of U.S. Bancorp common stock. In return, U.S. Bank will gain more than one million consumer customers and about 190,000 small business customers, along with approximately $58 billion in loans and $90 billion in deposits, moving its deposit position in California from 10th to 5th.
“This increased scale will make the U.S. Bank brand a stronger player in these markets, which will increase competition with California’s three largest banks,” the company said. “This will provide benefits for both customers and the communities served by the combined organization through improved technology, products and customer choice.”
U.S. Bank says the acquisition will allow it to better serve the customers of both banks. It says it has continued to invest in technology that allows customers to interact with them when, how and where they want.
“Accelerated by the COVID-19 pandemic, 80% of U.S. Bank transactions are now being done digitally, a trend the bank expects will continue,” stated the news release. “These industry-leading digital tools allow customers to bank anywhere and however they choose in a way that is safe, simple and convenient.”
At the same time, the bank notes that research has shown that preserving a physical banking presence holds value for customers. People who use digital banking still tend to combine it with in-person methods, either because they want a human interaction or because they feel better about giving personal information to a live teller.