French connection for upbeat Egg
ONLINE bank Egg has unveiled a £90m push into continental Europe and set a target of securing a million French clients within three years. The firm, majority-owned by the Prudential, will pay £5m for French internet operation Zebank and reimburse current owners Groupe Arnault and Dexia for the additional £18.5m they have pledged to invest in the business before the sale is completed.
The deal includes distribution agreements with French department stores group La Samaritaine and perfume stores chain Sephora, which are both controlled by Groupe Arnault's backer, French luxury goods magnate Bernard Arnault.
The acquisition also extends Egg's online distribution agreement with Microsoft into France. Egg will invest £15m to develop the business and £50m in marketing to bring the acquisition to break even within three years.
Analysts said the deal, which brings with it 70,000 Zebank clients, represented a solid foundation for Egg's European ambitions and offered great potential for Egg's core credit-card business. 'Zebank would give Egg a plug-and-play business in France, including all the relevant regulatory licences, staff and infrastructure,'said Merrill Lynch. 'The French credit card market is attractive and seems ripe for some new competition.'
