Nationwide to take over Virgin Money as £2.9bn deal confirmed

Nationwide Building Society is set to take over smaller rival Virgin Money after the pair agreed a deal worth around £2.9bn.

The move is set to create the UK’s second largest mortgage and savings group after a preliminary agreement earlier this month.

Virgin Money, which was bought by Clydesdale Bank’s parent company in 2018, employs a workforce of around 3,000 people at is head office in Glasgow. Nationwide said it doesn’t intend to change staffing at the headquarters “in the near term”.

Nationwide has put forward a 220p-a-share approach, including a planned 2p-per-share dividend payout, which will now be voted on by Virgin Money shareholders.

Nationwide said: “Nationwide’s board agreed that a binding offer to acquire Virgin Money was in the best interests of the society, and its present and future members, following full consideration and the appropriate due diligence, and after taking comments from members into account.”

The tie-up would create a combined lender worth around £366.3bn, with total lending and advances of about £283.5bn.

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

But the move will spell the end of the Virgin Money brand, with Nationwide planning to rebrand the Virgin Money business as Nationwide within six years, although it will keep the two brands initially.

Nationwide said it would keep a branch in each location where the combined group is present, until at least the start of 2026 and “values Virgin Money’s ongoing presence in Glasgow and Newcastle”.

“There may be some limited workforce changes to reduce the size of overlapping central functions relating to Virgin Money ceasing to be a standalone publicly listed company,” the groups said.

Richard Lochhead, Scotland’s minister for small business, innovation, tourism and trade, said: “We are engaging with Nationwide and Virgin Money to establish the potential impact of this announcement.

“Virgin Money is an important employer in Glasgow and our priority will be to protect these skilled jobs.”

Nationwide also stressed it will remain a mutual building society if the deal goes ahead and is given the green light by Virgin Money’s shareholders.

Nationwide chief executive Debbie Crosbie said: “This acquisition strengthens Nationwide and means we can offer more value and broader services for our current and future members.

“More people will experience the benefits of mutual ownership and the customer-focused approach of a building society.”

Virgin Money chief executive David Duffy said: “The proposed combination with Nationwide presents an exciting opportunity to build on Virgin Money’s significant strategic and operational progress, including the consistent growth in our retail and business customers, deposits and target lending.”