Citi has completed the purchase of Egg Banking plc (Egg), the world's largest pure online bank and one of the UK's leading online financial services providers, from Prudential PLC. In addition, Citi has appointed Egg CEO Ian Kerr to run Egg and Citi UK Consumer.
The acquisition price is GBP 546 million, or approximately $1.092 billion(1), in cash, subject to any closing adjustments to the final accounts. Completion follows receipt of regulatory approvals and, as announced on 29 January 2007, is expected to be accretive in its first year.
Between them, Egg and Citi UK Consumer have over four million customers, a significant share of the UK credit card market, and Egg's outstanding online platform, customer service and brand. Citi Consumer UK has a network of five retail banking and 49 consumer finance branches, and offers current accounts, wealth management, offshore banking and mortgages, which complement Egg's online payment and account aggregation services, credit cards, personal loans, savings accounts, and insurance products. A strategy is being formulated to create synergies between both businesses and maximize the potential for the key stakeholders - customers, colleagues, and shareholders.
Ian Kerr brings extensive experience and an established track record in UK financial services to Citi. Before joining Egg as CEO in November 2006, he was Retail Banking Chief Executive at Halifax Bank of Scotland, which at that time had $400 billion in assets, $4 billion in profit and 7,500 employees. Previous appointments include Group Services Director with HBOS, Chief Executive of Birmingham Midshires Building Society, and management positions with Lloyds Bowmaker Finance Group.
George Awad, CEO, Citi Global Consumer Group, Europe, Middle East and Africa, said: "The combined business will have great brands, great people, great technology and great customer service. This acquisition provides us with meaningful scale in consumer financial services in the UK, a key strategic market, and enables us to enhance the value proposition for customers and grow our business. Citi is also learning from Egg's successful direct banking platform and customer service programs."
Ian Kerr, Country Business Manager, Citi UK Consumer and Egg, said: "There are exciting times ahead as Citi and Egg's joining forces creates great opportunities for our people and is great news for our customers. The combination of Egg and Citi will be a powerful proposition as we use our shared knowledge and expertise to provide a broader range of products and distribution from online through to branches."
The Egg acquisition is consistent with Citi's strategic growth plans for the UK, and builds on Citi's position as a significant player in UK financial services. In February 2007, Citi Global Wealth Management closed the acquisition of Quilter, one of the UK's most respected wealth advisory firms.
(1)Exchange rate calculated at GBP 1.00 = US $2.00