Orange To Acquire Majority Stake In Groupama Banque, Highlights 'Major Step Forward In Our Ambition To Diversity Into Mobile Financial Services'

Orange SA (ADR) ORAN, a France-based European mobile operator, announced on Friday it has entered into an agreement to acquire Groupama Banque, a France-based financial institution that provides a range of banking products and services to individuals, professionals and companies.

Orange will acquire a 65 percent stake in Groupama Banque and will be renamed Orange Bank. The new entity will launch a banking service specifically designed for mobile usage in France in 2017 and will be marketed under the Orange brand.

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Orange Bank will offer its customers banking services including accounts, savings, loans and insurance services and payments. The company expects to attract over 2 million customers in France.

The deal is expected to close in the third quarter of 2016.

Stéphane Richard, chairman and chief executive officer of Orange, said, "This agreement is a major step forward in our ambition to diversify into mobile financial services as we outlined in our Essentials2020 strategy. Groupama Banque will bring an existing banking structure as well as considerable experience in managing customer relations remotely within a banking context. This will enable us to move forward rapidly in order to provide our customers with an innovative, 100 percent mobile banking service, first in France and then in Spain and Belgium. By leveraging the power of its brand, its distribution network and its extensive experience in digital services, Orange aims to bring mobile banking into a new dimension."

Thierry Martel, CEO of Groupama, said, "This partnership represents an important step for Groupama. It will enable us to leverage Orange's technical know-how and its expertise in digital services to accelerate our existing online banking activity. Through this partnership, we are effectively combining two powerful and complimentary brands in order to offer our customers a disruptive banking service. We are aiming to put the highstreet bank into our customers' pockets, turning tomorrow's bank into today's reality."

Shares of Orange were trading lower by 1 percent Friday morning.