Egg sells French business to ING
25 November 2004 | 5788 views | 0
UK Internet bank Egg has agreed to sell its French savings and online brokerage business to Dutch financial services group ING. Financial terms of the sale were not disclosed.
Egg, which is majority owned by UK insurer Prudential, said in October it had received an offer from ING Direct France for its troubled French unit and had granted the Netherland-based bank exclusivity to conclude the deal.
The UK bank says it is going ahead with the sale after consulting the French Works Council. Under the deal, 45,000 savings and investment accounts will be transferred to ING Direct France and 40 of Egg's 450-strong workforce in France will be redeployed.
Presently, savings account liabilities subject to the transaction currently total approximately EUR35 million (£25 million) and investment account funds under administration total EUR30 million (£21 million). Egg says no assets will be transferred to ING Direct France. The deal is expected to be completed by the end of the year.
Speaking earlier this week, ING CEO Michel Tilmant said the benchmark payment for customer accounts under such deals is $75 per head. That would value Egg's 45,000 French savings and investment accounts at about EUR3.38 million.
Egg announced in July it was pulling the plug on its loss-making French operations. The bank had invested £280 million into the business only to attract 133,000 customers two years after launch. Egg has since sold the unsecured lending assets of its French business to Banque Accord for EUR140 million (£96 million) in cash.
In a statement, the bank says the cost of exiting France remains unchanged at EUR170 million.
Egg shares were down 0.50 pence in mid-morning trading to 94.50 pence.