E*TRADE Sells Stake in French Venture

[London, ENGLAND] Online financial services provider
E*TRADE said Friday
it has agreed to sell its minority equity stake in
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.

However, E*TRADE’s entire European strategy is built
on the premise that it should have majority stakes
in ventures within key European markets. As a consequence,
the sale of its minority stake in CPR-E*TRADE has always
been on the cards.

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

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

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