Mitsubishi UFJ announced today that it has signed a deal to take full control of its US subsidiary Union Bank of California.

Mitsubishi UFJ will acquire the 34.6% of the US bank that it does not already own with a bid of $3.5 billion.

Japan's biggest banking group was forced to sweeten its offer after a previous bid of $3 billion was rejected as too low by a committee at the US subsidiary.

Mitsubishi UFJ already owns 65.4% of the shares in UnionBanCal, the holding company for the Union Bank of California, which ranks 20th biggest in the US in terms of deposit size.

The US financial crisis has battered American banks but made them more affordable for foreign buyers willing to take the plunge.