Nationwide Building Society set for £2.9bn takeover of Virgin Money
Nationwide, the UK’s largest building society, has agreed terms with retail bank Virgin Money over a potential £2.9 billion acquisition deal.
Nationwide seeks to acquire Virgin Money
If the potential acquisition goes ahead, it would create a combined group with £366.3 billion in total assets and £283.5 billion in advances, ultimately positioning Nationwide – which is set to remain a building society – as the second largest provider of savings and mortgages in the country.
Nationwide says it expects to integrate Virgin Money “gradually over multiple years”, and plans to operate the retail bank as a separate business with a separate banking licence and board “in the medium term”, but ultimately intends to phase out the bank’s brand image over a six-year period of the deal being completed.
It adds it does not intend to make any material changes to Virgin Money’s approximately 7,300 employee headcount “in the near term”, and will not alter the presence of its 91 branches – which serve 6.6 million customers in the UK – until the start of 2026 at the earliest.
The member-owned building society currently has 17 million members, over 18,000 employees and maintains around 600 branches across the UK.
The potential deal has yet to be finalised and Nationwide has until 4 April to put a final offer forward. Should the deal land, Virgin Money’s shareholders, who will need to approve the deal, would receive a total of 220p for each share they currently hold, marking a 38% premium on Virgin Money’s share price as of Wednesday.
Writing to members on Thursday, Kevin Parry, chairman of Nationwide, said that if the deal gets the go-ahead, he expects the combination to “create a stronger and more diverse business”, and that over time, “we would aim to provide a wider range of products and services to our customers and members, including Virgin Money’s well-established business banking services”.
David Bennett, chairman of Virgin Money, adds that the potential acquisition is poised to deliver “attractive value for our shareholders”, while CEO David Duffy says the “combined scale and strength would expand our customer offering and complete our journey in the banking sector as a national competitor”.
