U.S. Bancorp says that regulatory approval of its $8 billion deal for MUFG Union Bank may take longer than previously expected.
When the merger was announced in September, the companies said they were expecting to finalize it in the first half of 2022. In January, U.S. Bancorp executives reiterated that timeline.
But in a regulatory filing Tuesday, the Minneapolis-based parent company of U.S. Bank was more equivocal about the timing.
"At this time, it is uncertain whether such approvals will be received in time to allow for closing to occur in the first half of 2022; however, the parties continue to make significant progress in planning for closing and integration while awaiting regulatory approvals," U.S. Bancorp said in the
A U.S. Bancorp spokesperson declined to comment Wednesday.
Any delay could pinch investors, since U.S. Bancorp suspended its share buyback program last fall pending the acquisition.
During an April 14 call with analysts, U.S. Bancorp Chief Financial Officer Terry Dolan said that the $586 billion-asset company was still working to be ready to close the deal within about 45 days of regulatory approval.
He also said the systems conversion with MUFG Union, which is owned by Japanese banking giant Mitsubishi UFJ Financial Group, was expected to be completed “late in the second half of 2022.”
“As you know, regulatory approvals are not within the company's control and may impact the timing of the closing of the deal,” Dolan said at the time.
U.S. Bancorp continues to expect to realize net cost savings of about $85 million to $100 million in the second half of 2022 from the deal, Dolan said last month.
Last summer, the Biden Administration
The U.S. Bancorp-MUFG Union Bank deal has drawn particular scrutiny.
The Federal Reserve and the Office of the Comptroller of the Currency held a
U.S. Bancorp executives have argued the deal will give the company a foothold in growing West Coast markets and boost competition with larger banks that dominate in these areas.
U.S. Bancorp’s
The Fed has been weighing whether to grant approval on the condition that U.S. Bancorp would unwind the deal if it cannot solve compliance problems at MUFG Union within six months, the Capitol Forum reported in March, citing unnamed sources.
Apart from any issues specific to the Union Bank-MUFG Union acquisition, approval times for bank mergers
The merger between U.S. Bancorp and MUFG Union Bank would create a company with around $690 billion of assets.
M&T Bank’s
The Autonomous analysts wrote that U.S. Bancorp’s original timeline for the MUFG Union acquisition “had seemed aggressive to many market observers when it was first announced last September due to the size of the combined institution.”