Nationwide Building Society (NBS) has agreed a deal worth £2.9bn to take over Virgin Money (VMUK). The final deal hasn’t been sealed, but it’s believed that the terms will allow the Virgin Money brand to continue operating for the next six years or so.
Nationwide agrees deal to take over Virgin Money
The offer of 220p per VMUK share represents 38% added to the company’s price on the open market on the day of the offer. It has also been suggested that a 2p dividend per share will be added to that figure. The expanded firm will be the second-largest mortgage provider in the UK, and also the second-largest saving group, with total lending and advances of approximately £283.5bn.
All 700 UK branches will be kept in place until 2026 at the earliest. After that, we may see both brands integrated. It’s not expected to have an immediate impact on the 7,300 employees of Virgin Money, with Nationwide pointing out that no changes are due “in the near term”.
Nationwide is planning to fund the deal with its existing cash reserves, believing that this will allow it to offer more financial products and services to its members.
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Debbie Crosbie, the chief executive of Nationwide, said that the combined group “would bring the benefits of fairer banking and mutual ownership to more people in the UK”, while confirming that NBS will remain as a building society.
By bringing together the 18 million Nationwide customers and the 6.5 million who use Virgin Money, this will be the biggest UK bank takeover since the financial crisis in 2008.
