According to the announcement , US Bank Corporate Trust Services will acquire approximately 14,100 new client issuances and $410 billion in assets under administration and US Bank Institutional Trust & Custody will acquire approximately 1,700 new clients and $570 billion in assets under administration.
The terms of the agreement include an initial up-front payment of $720 million, with up to an additional $80 million payable within one year based on business retention levels. The acquisition will enhance corporate trust offices in six current locations and add 19 new corporate trust offices and institutional custody offices primarily in the mid-Atlantic and southeastern states, US Bancorp said. In addition, Wachovia is to enter into a referral agreement with US Bank following the close of the acquisition.
Diane Thormodsgard, President of Corporate Trust, Institutional Trust & Custody for US Bank, told PLANSPONSOR.com that the company considers this a low risk transaction. Because US Bank already uses many of the same systems and technology as Wachovia, it believes there will be minimal disruptions in service for existing Wachovia clients during the conversion process.
“We are very interested in maintaining relationship management close to customers in the marketplace,” Thormodsgard said. Because of this, she said US Bank is interested in retaining many of the Wachovia staff and offices clients are currently used to dealing with. She stated that decisions on staff and office retention will be made as the companies move through the conversion process.
USBank currently has 31 corporate trust offices across the country and offers a complete line of trust services. The company currently has 36 institutional trust & custody offices in 24 states focusing on trust and custody services, retirement, investment and health savings accounts for institutional clients.
US Bank expects to close the acquisition in December, subject to regulatory approvals. Conversions are expected to be completed by September 2006. US Bancorp completed a presentation with complete details of the agreement as well as information on what the acquisition means for US Bank’s position in the marketplace.