You can use identities such as $(A\cap B) \cup (A \cap C) = A \cap (B \cup C)$ to get $(A \cap B) \cup (A \cap B') = A \cap (B \cup B') = A \cap U = A$.
But I prefer to think of what it is saying. $A \cap B$ means "everything in A and in B" and $A \cap B'$ means "everything that is in A that is not in B" and $(A\cap B) \cup (A \cap B')$ means "every thing that is in A and B combined with everything that is not in B". Is there a logical reason that "everything in A and B combined with everything in A and not in B" would be "A"?
Well, I hope it should be obvious. Everything in A is either in B or not in B so combining the items of A that are not in B with those that are should give you all the items in A.
So the best way to express that idea directly would be:
$A = A \cap U = A \cap (B \cup B') = (A \cap B) \cup (A\cap B')$. Or if that's a little too abstract, I rather like to do an element by element proof:
Let $x \in A$ either $x \in B$ or $x \in B'$. If $x \in B$ then $x \in A \cap B$. If $x \in B'$ then $x \in A \cap B'$. Either way $x \in A \cap B$ or $x \in A\cap B'$ so $x \in (A \cap B) \cup (A\cap B)$. So $A \subseteq (A\cap B) \cup (A \cap B)$. Likewise if $y \in (A \cap B) \cup (A\cap B)$ then either $y \in (A \cap B) \subset A$ or $y \in (A\cap B') \subset A$. Either way, $y \in A$ so $(A\cap B)\cup (A\cap B') \subseteq A$.
$A \subseteq (A\cap B) \cup (A \cap B)$ and $(A\cap B)\cup (A\cap B') \subseteq A$, so $$(A\cap B)\cup (A\cap B') = A$.
A fourth way is the big guns.
Let $x \in U$ now one of four things might happen:
1) $x \in A$ and $x \in B$. Then $x \in A$ and $x \in A\cap B$ and $x \in (A \cap B) \cup (A \cap B')$.
2) $x \in A$ and $x \not \in B$. Then $x \in A$ and $x \in B'$ and $x \in A \cap B'$ and $x \in (A \cap B) \cup (A \cap B')$
3) $x \not \in A$ and $x \in B$. Then $x \not \in A$ and $x \not \in A \cap B$ and $x \not \in A \cap B'$ so $x \not \in (A \cap B) \cup (A \cap B')$.
4) $x \not \in A$ and $x \not \in B$. Then $x \not \in A$ and $x \not \in A \cap B$ and $x \not \in A \cap B'$ so $x \not \in (A \cap B) \cup (A \cap B')$.
Looking at the four cases we see $x \in A \iff x \in (A \cap B) \cup (A \cap B')$. Thus $A$ and $(A \cap B) \cup (A \cap B')$ have precisely the same elements and neither has any element the other doesn't. In other words, $A = (A \cap B) \cup (A \cap B')$.