Mitsubishi UFJ Financial Group unit to buy Pacific Capital Bancorp for $1.5 bn

UnionBanCal Corp, a unit of Mitsubishi UFJ Financial Group (MUFG), yesterday struck a deal to buy Pacific Capital Bancorp, for around $1.5 billion in cash in order to expand in California.

San Francisco-based UnionBanCal will pay $46 a share, a premium of 60 per cent to Pacific Capital's closing price of $28.69 on 9 March. 

Santa Barbara, California-based Pacific Capital, with $5.9 billion in assets, is the parent company of Santa Barbara Bank & Trust, N.A (SBB&T), a nationally chartered bank headquartered in Santa Barbara which operates 47 branches in eight California counties on the Central Coast of California.

SBB&T provides community banking, commercial banking, and trust and wealth management products and services.

The acquisition of Pacific Capital and its SBB&T will help UnionBanCal expand its geographic footprint to the Central Coast.

UnionBanCal will become the leading bank in the Santa Barbara Metropolitan area, fourth in Oxnard-Thousand Oaks and in Salinas-Carmel and among the top five banks in Central Coast.

This acquisition will strengthen UnionBanCal's ability to serve customers through greater scale and distribution in community banking, consumer, commercial and small business lending, and wealth management, said UnionBanCal in a statement.
 
''Santa Barbara and the Central Coast are very attractive regions for banking and wealth management services, and represent an important geographic expansion for Union Bank,'' Union BankCal president and CEO, Masashi Oka said in a statement.
 
UnionBanCal, which has 414 branches in California, Washington, Oregon, Texas and New York and two international offices, was acquired by Tokyo-based  MUFG in 2008 for $3 billion. (See: Japan's largest bank offers $3 billion for remaining stake of its US unit)

The acquisition of Pacific Capital is UnionBanCal's biggest, topping its 2004 purchase of Jackson Federal Bank for $307.4 million, according to data compiled by Bloomberg.