Mitsubishi UFJ Financial Group Inc. and UnionBanCal Corp. agreed on a tender offer at a raised price of $73.50 a share in a deal worth $3.5 billion, MUFG said Monday.
Japan's biggest bank has been trying to take over the 35 percent of San Francisco-based UnionBanCal it doesn't already own to make it a wholly owned subsidiary.
But UnionBanCal rejected a lower buyout offer last week, saying the $3 billion price, or $63 per share in cash, was too low.
MUFG already owns a 65.4 percent stake in the U.S. bank, and had wanted to buy the remaining interest through a tender offer.
It said in a release the date for the beginning of the tender won't be later than Aug. 29.
UnionBanCal had also rejected an earlier $58 a share offer from MUFG.
Katsunori Nagayasu, president of Bank of Tokyo-Mitsubishi UFJ, a MUFG subsidiary, said the agreement will provide new opportunities for expanding in the U.S. market.
"We are pleased to deepen this relationship and are confident that this transaction will create long-term value for MUFG shareholders, while creating new opportunities for (UnionBanCal) employees and customers," he said.
MUFG and its subsidiaries have owned the majority of UnionBanCal since 1996.
Richard Farman, chairman of the U.S. bank's committee weighing the proposed deal, said the latest deal is in shareholders' interests.
"I'm confident Union Bank's present and future customers will be delighted with the results," he said.
UnionBanCal shares, which have surged lately, closed at $65.49 in New York on Friday.
MUFG shares rose 3.3 percent to ¥845 in Tokyo on Monday. The news of the acquisition came after trading ended.