Big bank SOLD to compete in £2.9bn deal – what it means for your money

VIRGIN MONEY has agreed to be acquired by Nationwide Building Society in a £2.9 billion deal, the companies have announced.

Nationwide said the merger would enable the company to offer a broader range of products and services to members and increase their financial strength.

Details have not yet been finalized, but the deal would allow the two brands to operate as separate entities, with the Virgin Money brand remaining on the market for six years.

Nationwide was offered an all-cash offer of 220 cents per Virgin Money share last Wednesday, representing a 30% premium to Virgin Money’s share price.

Both parties confirmed that the deal was mutual and will be financed from existing cash resources.

This should enable them to offer a wide range of products and services to its existing members.

Nationwide said it does not intend to make any material changes to the size of Virgin Money’s 7,300-strong workforce in the short term.

Combined, the group would have total assets of £366 billion and become the second largest mortgage savings group in Britain by market share.

Nationwide CEO Debbie Crosbie said: “Importantly, Nationwide will remain a building society, and a combined group would bring the benefits of fairer banking and cross-ownership to more people in Britain, including our ongoing commitment to retain existing branches, as part of our ‘Branch Promise’ and industry-leading levels of customer service.

“We believe the combination would create a stronger and more diverse company that will be better positioned to deliver value to our members and customers, both now and in the future.”

Last month we saw a similar deal struck between Barclays and Tesco Bank.

Tesco Bank, which has more than five million customers, was sold to Barclays in an agreed deal that would include the takeover of almost 3,000 staff.