Union Bank of California has agreed to sell its merchant card payments processing business to US Bancorp subsidiary Nova Information Systems.
Under the agreement, Nova will acquire Union Bank's merchant accounts and will provide processing services, customer service and support operations to the bank's 10,000 merchant locations.
The bank has also entered into a marketing alliance with Nova and will promote the vendor's merchant payment processing services at its 302 branches located in California, Oregon and Washington.
Union Bank expects to record a gain on the transaction of approximately $56 million. A portion of the gain will be recorded at closing, with the remainder being recorded over the term of the marketing agreement.
Steve Glaser, executive vice president and head of consumer asset management at Union Bank, comments: "Nova's premier services and tools will allow our merchant customers to take advantage of enhanced service levels and new value-added applications including electronic cheque conversion and electronic gift cards."
The transaction is expected to close late in the second quarter 2004.
Nova also recently announced it was buying Poland-based Bank Zachodni WBK's marchant payment business, CardPoint.