Nationwide completes takeover of Virgin Money in major bank tie-up
Virgin Money’s shares have been cancelled from trading on the London Stock Exchange following the acquisition.
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Nationwide has completed its £2.9 billion takeover of Virgin Money, bringing together two of Britain’s largest banking groups.
Virgin Money’s shares have been cancelled from trading on the London Stock Exchange following the acquisition.
The purchase of the bank by the building society will pave the way for the creation of a combined group with around 24.5 million customers, more than 25,000 staff and nearly 700 branches.
But combining two of the country’s largest lenders is a process that is expected to take several years.
It will eventually see the Virgin Money brand disappear from UK high streets, but it will not happen automatically.
The two brands will continue to exist on UK high streets for between four and six years, before Virgin Money is fully absorbed by Nationwide and customers are switched over.
All Virgin Money profits will be retained for the benefit of customers and, for the first time in the UK, a full service business bank will be part of a large and modern mutual
The acquisition was approved by a judge at a specialist court last week, after 90% of Virgin Money’s shareholders backed the scheme at a vote earlier this year.
As a building society, Nationwide said it was not required to seek members’ permission for such a takeover.
This decision was met with some criticism and a small group of members organised a campaign in the hope of demanding a vote.
The previously FTSE 250-listed Virgin Money was de-listed from the London stock market on Tuesday as a result of it being taken private.
The bank was founded by billionaire businessman Sir Richard Branson in 1995.
Sir Richard’s Virgin Group was thought to be in line to net more than £400 million from the sale, as he still had a 14.5% stake in the bank.
Debbie Crosbie, chief executive of Nationwide, said: “Nationwide is now a stronger mutual and able to deliver even greater value through our unique branch promise, leading customer satisfaction, and competitive savings and lending rates.
“All Virgin Money profits will be retained for the benefit of customers and, for the first time in the UK, a full service business bank will be part of a large and modern mutual.”
A mutual refers to Nationwide’s structure whereby it is owned by members, rather than shareholders like most UK banks.