Nationwide to buy Virgin Money bank for £2.9bn - WhatsNew2Day (2024)

Nationwide Building Society has agreed terms to potentially buy Virgin Money UK in an all-cash deal worth around £2.9bn, creating one of Britain’s largest banks.

The deal will see Nationwide remain a building society, the lender said, but with an expanded set of products and services, and greater scale and financial strength.

The 220 pence per share offer, which comprises cash consideration of 118 pence and a dividend of 2 pence per share, is more than a 38 per cent premium to Virgin Money’s unchanged share price on March 6 .

The combined group will control total assets of more than £366bn and total loans and advances of almost £284bn, representing the second largest provider of mortgages and savings in the UK.

Nationwide Building Society chairman Kevin Parry said: ‘A combination with Virgin Money would accelerate Nationwide’s strategy and create a stronger, more diverse modern mutual.

“The combination would increase Nationwide’s scale and financial strength, put us in a stronger position to continue providing fairer share payments to eligible Nationwide members and offer rates on mortgages and savings that are, on average, better than the market average”.

Nationwide, which is Britain’s largest building society, highlighted the scaling opportunities offered by Virgin Money’s position as the country’s sixth largest retail bank.

It also highlighted its credit card business, which controls an 8.6 per cent market share, and its £9 billion in existing business loan balances.

Nationwide said it does not intend to make any “material changes” to Virgin Money’s workforce of 7,300 full-time employees “in the short term” and would “safeguard the existing contractual and statutory rights of Virgin Money employees, including pension agreements and dismissal policies”. ‘.

Debbie Crosbie, chief executive of Nationwide, added: “We believe the combination would create a stronger, more diverse business that will be better positioned to deliver value to our members and customers, both now and in the future.”

Virgin Money said the deal would see the group benefit from Nationwide’s “scale and pace of investment”, as well as the building society’s ability to leverage its “capabilities and strengths”.

Virgin Money chairman David Bennett said: “Virgin Money’s board is pleased that Nationwide recognizes the considerable strengths and opportunities that exist across our business, and that the potential acquisition delivers attractive value for our shareholders.”

“We are confident that a combination would support an exciting new chapter for Virgin Money to benefit from Nationwide’s scale and ambition.”

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