Prudential has sold its UK banking business Egg for £575 million to Citigroup and has agreed a distribution agreement with the Group.
The sale was announced this morning and is due to complete by the end of April 2007.
Citigroup and Prudential have a UK distribution agreement through which Pru will provide life and pensions products to Egg’s customer base of around 3 million people for a five year period.
Pru has also announced that it will also be used by Citigroup for the distribution of life insurance products to the Group’s consumer banking customers in Thailand, Indonesia and the Philippines.
Pru says proceeds from the sale will be used to reduce net debt and is estimated to improve the Group surplus by an estimated £300m.
Group chief executive Mark Tucker says: “The sale of Egg to Citigroup realises greater value for our shareholders than retaining the business within the Group.”
For the financial year ending December 31 2006, Egg’s operating losses on continuing ordinary activities before tax are estimated to be £145m.