Mitsubishi UFJ Financial Group Inc. said Tuesday it will sell most of its American banking unit MUFG Union Bank to U.S. Bancorp in a deal worth around $17.6 billion.
MUFG Union Bank's operations for corporate customers will be transferred to the major Japanese financial group and all of the bank's shares will be sold to U.S. Bancorp by June next year, according to the group's press release.
MUFG said it will acquire an approximately 2.9 percent stake in U.S. Bancorp in the deal, forming a capital tie-up as the Japanese company reassesses its underperforming U.S. sectors.
Union Bank, which became a subsidiary of MUFG in 2008, operates around 300 branches around the West Coast of the United States. The bank has been struggling financially in recent years due to low interest rates and rising costs to maintain the outlets.
Headquartered in Minneapolis, Minnesota, U.S. Bancorp operates more than 2,000 branches in the United States.