Citigroup, the worlds biggest financial services company, said this morning that it will buy London-based Prudential's Egg banking business -- the world's largest pure online bank -- for $1.13 billion. As part of the agreement, Prudential will provide life and pension products to Egg 
customers for the next five years. The purchase includes over three million customers (more than quadruple Citigroup's 800k UK credit card base), and products and services including online payment services, credit cards, personal loans, savings accounts, mortgages, insurance, and investments. Citigroup said it expects the deal to enhance its earnings in its first year, and that it will be able to learn from Egg's successful platform to enhance its global offerings. George Awad, a Citi exec: "We will deliver growth by combining Egg's leading edge online products and distribution with Citigroup's global banking expertise and scale." The transaction is expected to close in the next 2-3 months.
• Sources: Press Release, Wall Stret Journal
• Related commentary: Citigroup Unlike Other Big U.S. Banks, GE and Citigroup Rallies: How Wall St. Missed It, Irresponsible Insinuations about Citigroup 'High-Flyer'
• Potentially impacted stocks and ETFs: Citigroup Inc. (C). Competitors: UBS AG (UBS), ABN Amro Holding N.V. (ABN), Mitsubishi UFJ Financial Group Inc. (MTU). ETFs: iShares S&P Global Financial Index Fund (IXG), iShares Dow Jones US Financial ETF (IYF), iShares Dow Jones US Financial Services (IYG), streetTRACKS KBW Bank (KBE), Vanguard Financials VIPERs (VFH), Financial Select Sector SPDR ETF (XLF)
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