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Mergers, Acquisitions, Alliances and Synergies Case Study
Case Title:
Citigroup’s Acquisition of Egg Bank: The Spin-Offs
Publication Year : 2007
Authors: Rajan Shah, Ruchi Mankad
Industry: Banking
Region: US
Case Code: MAA0115A
Teaching Note: Not Available
Structured Assignment: Not Available
OR
Abstract:
Egg Banking plc (Egg), a UK based online financial service provider was part of Prudential plc, leading insurer globally. Egg had created strong brand name in UK market by providing innovative products in banking, investment and insurance. It had 5% share in UK’s credit card market. But, France operation of Egg bank remained unprofitable and in 2004 it existed from French market to focus on UK business. Meanwhile, condition in UK unsecured market badly affected to Egg’s performance and in 2006 it reported loss reported loss of £145 million.
In 2007, Citigroup acquired Egg bank for £575 million ($1.13 billion) in cash from Prudential. Citigroup expected to have synergies in terms of Egg’s customer base and brand name that it had created in UK market.
The case details about Citigroup’s inorganic growth strategies in UK market. Also, it details about how Citigroup be able to capitalize the acquisition and able to create leadership position UK’s financial market
Pedagogical Objectives:
- To understand business spin-offs
- To study the online banking scenario in UK market
- To understand inorganic growth strategy
- To understand competitive scenario in online banking market.
Keywords : Mergers,Acquisitions,Alliances Case Study;Online Banking Sector; Egg Bank; Prudential Plc.; Market Development Strategies; Targeting New Product Segment; Competitive Scenario; Wealth Maximization; Citigroup; Citigroup in Britain; Unsecured Lending Market; Egg Bank in France; Citigroup’s Acquisition of Egg Bank
