E*TRADE Sells Stake in French Venture
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[London, ENGLAND] Online financial services provider E*TRADE said Friday it has agreed to sell its minority equity stake in CPR-E*TRADE, a joint venture aimed at the French retail brokerage market, to its venture partner CPR.
Picking up E*TRADE's share will cost French investment bank CPR around 82 million euros (US $70 million).
E*TRADE's decision to back out of the original agreement appears to have been triggered by high level disagreements about the future of the venture. The sale paves the way for E*TRADE to take a majority holding in another venture in France, although no new projects have yet been announced.
Launched in March 1999, CPR-E*TRADE was formed three months earlier when E*TRADE's master licensee for France, Italy, Austria and the Benelux countries signed the original agreement with CPR. Subsequently E*TRADE acquired 100 percent of the licensee, leaving it with around 34 percent of CPR-E*TRADE.
Christos M. Cotsakos, chairman and chief executive of E*TRADE Group, said the deal with CPR would give his company greater flexibility to deliver on its global electronic model and consolidate European revenues.
"Following our strong success in North America, E*TRADE is now advancing an aggressive European growth strategy that targets key developed markets such as the U.K., Germany, France and the Nordic countries, as well as the fast growing Southern European markets," said Cotsakos.
So just how developed is the "key developed market" of France?
In a recent study, J.P. Morgan Securities says that online brokerage accounts in France will increase from 0.5 million in 2000 to 2.5 million by 2003, and that online trading activity in France is among the highest in Europe.
The sale of E*TRADE's equity stake in CPR-E*TRADE is subject to regulatory approvals and other closing conditions.