Pru sells Egg for £575m

Insurer Prudential agreed to part company with banking group Egg for £575m (€871m) today – just a year after it took complete control of the business.

US banking giant Citigroup will take on Egg after the Pru said a sale would realise greater value than retaining the internet-based operation, which is estimated to have made operating losses of £145m (€219.6m) last year.

In December 2005, the Pru announced that it would spend £200m (€303m) on buying out fellow shareholders – a move which valued the whole of Egg at £973m (€1.5bn). It took control after a year spent trying to sell its 79% stake.

As the world’s largest credit card issuer, Pru chief executive Mark Tucker said Citigroup saw “enormous opportunities” to develop Egg’s business.

Pru shares were up 2% following the announcement.