Japanese banks buys out US bank
It's yet another case of Japanese financial units buying abroad , and again a case of undervalued US assets looking like a good bargain, Mitsubishi UFJ Group, one of Japan's biggest banks, bought out the remaining assets of US-based Union Bank of California. The deal is for $3 billion, raises Mitsubishi' stake form 65% to 100%. Union Bank has 300 offices across California.
Analysts say that the buyout will enable Mitsubishi UFJ to more easily acquire other US banks through a fully owned US subsidiary.
Other Japanese banks have bee busy, contrary to historic practice, in buying outside of Japan this year. As a Financial Times article ("MUFG to buy out UnionBanCal for $3bn", 8/12/08) puts it, "In January, Mizuho, Japan's second largest banking group, paid $1.2bn for a stake in Merrill Lynch. Sumitomo Mitsui Financial Group invested about £500m ($950m) in Barclays this year and last month Tokio Marine agreed to acquire Philadelphia, a medium-sized non-life insurer in the US, for $4.7bn." In addition, Tokio bought Kiln, an insurance division of Lloyd's of London insurer for $824 million in March.
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