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Nationwide’s £2.9bn takeover of Virgin Money UK has been approved by Britain’s competition watchdog.
The Competition and Markets Authority said on Friday that the deal, which will create Britain’s second-largest savings and loans group, “does not give rise to a realistic prospect of a substantial lessening of competition.”
The deal will create Britain’s second-biggest savings and loans bank, behind Lloyds.
The CMA launched the investigation in May amid concerns about the impact of the deal on the provision of homeowner mortgages, buy-to-let mortgages and/or credit cards in the UK.
But the regulator said its investigation had concluded the merged business would not have an outsized position in any of those markets, with enough competition to keep it in check.
The takeover of the listed lender by Britain’s largest building society was not without controversy, with Nationwide refusing to give its 16 million property-owning members a vote on the deal.
Nationwide says the purchase will give it access to business banking, cheaper financing and lender profits.
The firm plans to operate Virgin Money as a separate brand for at least four years, paying tycoon and largest shareholder Sir Richard Branson at least £76m for the privilege, while gradually integrating the two lenders.
Nationwide has warned it will have to invest funds to improve Virgin Money’s customer service and IT systems.
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