UK bank Barclays has signed an agreement to acquire Tesco's retail banking business for around £600 million (€703 million) and establish an exclusive long-term partnership with the British supermarket chain to offer Tesco brand credit cards, personal loans and warehouses.
“We expect to have revenue of around £600 million, plus around £100 million (€117 million) of additional net cash after adjusting certain amounts of regulatory capital and transaction costs,” he said. Of this money to shareholders in the form of stock buybacks.
In this regard, the supermarket chain has indicated that it will retain all other existing Tesco Bank businesses, including insurance, ATMs and gift cards, as it is a profitable and capital-light business, with a strong link to its core retail offering. a company.
Around 2,800 Tesco Bank employees, including the management team, will move to Barclays as a result of the transaction, which is expected to be completed during the second half of 2024.
Completing the sale process and entering into the strategic partnership depends on judicial approval and the approval of the regulatory authorities, as is common practice in transferring banking operations.
CS Venkatakrishnan, CEO of Barclays, said: “This strategic relationship with the UK’s largest retailer will help create new distribution channels for our unsecured deposit and lending business.”
Ken Murphy, CEO of Tesco, said: “This transaction will significantly reduce our financial liabilities, which will in turn strengthen our balance sheet and allow us to focus on continuing to grow our core retail business.”
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