Union Bank of California to Sell Foreign Unit to Wachovia

Wachovia Corp. plans to buy the international banking business of Union Bank of California for as much as $290 million in cash to shore up the Charlotte, N.C., financial services company’s presence in several Asian cities, including New Delhi and Hanoi.

The acquisition would give Wachovia control of Union Bank’s relationships with 600 foreign banks plus a $2-billion loan portfolio. An undisclosed number of Union Bank’s executives and employees would join Wachovia.

Union Bank is a unit of San Francisco-based UnionBanCal Corp.

“We have great respect for Union Bank of California’s business and strong team,” Michael Heavener, head of Wachovia’s international unit, said in a statement, calling the fit between the two banks “near-perfect.”

Philip Flynn, vice chairman and chief operating officer of Union Bank, said the decision to exit international banking followed an assessment of the bank’s ability to compete in a changing landscape.

“Given the additional amount of resources that would have been required to grow the business and remain competitive ... we concluded that the business would be more valuable” to another company, he said in a statement.

Wachovia’s shares climbed 24 cents Friday to $48.02, while UnionBanCal rose 40 cents to $68.98.