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Prudential agrees to sell Egg business to Citigroup for 575 million pounds

Prudential agrees to sell Egg business to Citigroup for 575 million pounds

Citigroup Inc. said Monday it agreed to buy British insurer Prudential PLC's Egg Banking PLC online bank for 575 million pounds (US$1.13 billion; euro872.9 million) in cash.
The transaction will probably boost earnings in the first year, Citigroup said in a statement.
The combination of Egg and Citigroup's U.K. consumer operations will create a financial services provider with over 4 million customers, more than quadrupling Citigroup's 800,000 U.K. credit card base.
"Egg is an excellent strategic fit with our business and we are excited to have the opportunity through this acquisition to broaden our international consumer banking business," said Ajay Banga, chairman of Citigroup Global Consumer Group - International.
The purchase includes over 3 million Egg customers, and products and services including online payment services, credit cards, personal loans, savings accounts, mortgages, insurance, and investments.
Prudential also agreed outline terms with Citigroup to provide life and pensions products to Egg's customer base for a five-year period.
Citigroup's U.K. consumer business now serves over 1 million customers primarily in the wealth management and near-prime lending markets, and offers current, savings, and foreign currency accounts, credit cards, investments, offshore banking, personal loans, and mortgages.
Prudential said the sale will enhance its earnings per share this year and the proceeds will be used to reduce net debt.
"The sale of Egg to Citigroup realizes greater value for our shareholders than retaining the business within the group," said Prudential Chief Executive Mark Tucker. "Citigroup is the largest credit card issuer in the world and sees enormous opportunities to develop Egg's business in the U.K."
The transaction is subject to regulatory approvals and is expected to be completed by the end of April.
Shares in Prudential rose 1.6 percent to 713.5 pence (euro10.83; US$13.98) on the London Stock Exchange.
Prudential PLC is not affiliated with New Jersey-based Prudential Financial Inc.


Updated : 2021-03-06 23:40 GMT+08:00