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U.S. Bancorp Picks Up Wachovia Unit

The deal is valued at $720 million.
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agreed to sell its corporate trust, institutional custody, document custody and structured finance trust service units to a division of

U.S. Bancorp

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in a $720 million deal.

The sale should generate a fourth-quarter gain of $185 million to $200 million, Wachovia said. The transaction will reduce goodwill and other intangibles by roughly $205 million.

Wachovia, based in Charlotte, N.C., expects the sale to be relatively neutral to its 2006 earnings per share. The company could get up to $50 million more, depending on the level of business U.S. Bancorp retains.

Wachovia's corporate and institutional trust business offers custodial services, securities lending, institutional clearing and other services. The transaction should close in the fourth quarter.

Minneapolis-based U.S. Bancorp said its corporate trust services unit will be taking over about 14,100 new clients and $410 billion in assets under administration. The company's institutional trust business will acquire around 1,700 new clients and $570 billion in assets.

Shares of U.S. Bancorp were up 20 cents to $30.98, and Wachovia was gaining 24 cents at $54.89.