Nationwide Building Society has agreed terms to acquire Virgin Money in a deal valued at £2.9bn.
The deal will see both Nationwide and Virgin Money continue to operate under their existing brand names, with the Virgin Money brand expected to remain in place for approximately six years post-acquisition.
Nationwide has indicated that Virgin Money’s workforce, which currently stands at 7,300 employees, would not see significant changes “in the near term.”
Virgin Money shareholders have been offered 220p per share, marking a 38% premium on the share price recorded just prior to the announcement. Additionally, shareholders would benefit from a forthcoming 2p per share dividend, which would be disbursed on top of the proposed acquisition price.
Should the acquisition proceed, the merged entity would become the second-largest group in the UK by market share for mortgages and savings, with a combined worth of about £366.3bn and total lending and advances nearing £283.5bn.
Chairman of Nationwide Building Society, Kevin Parry said: “A combination with Virgin Money would accelerate Nationwide’s strategy and create a stronger, and more diverse, modern mutual.
“The combination would increase Nationwide’s scale and financial strength, put us in a stronger position to continue to provide Fairer Share Payments to eligible Nationwide members, and offer rates for mortgages and savings that are, on average, better than the market average.”
Nationwide, CEO Debbie Crosbie added: “Importantly, Nationwide will remain a building society, and a combined group would bring the benefits of fairer banking and mutual ownership to more people in the UK, including our continuing commitment to retain existing branches, as part of our ‘Branch Promise’ and leading levels of customer service.
“We believe the combination would create a stronger and more diverse business that will be better placed to deliver value to our members and customers, both now and in the future.”
Chairman of Virgin Money UK PLC, David Bennett commented: “The Board of Virgin Money is pleased that Nationwide recognises the considerable strengths and opportunities that exist across our business, with the potential acquisition delivering 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.”
Virgin Money UK PLC CEO David Duffy concluded: “This potential transaction with Nationwide represents an exciting opportunity to build on the significant progress we have made in becoming the only new Tier 1 bank in recent history.
“The combined scale and strength would expand our customer offering and complete our journey in the banking sector as a national competitor.”
