Nationwide yesterday struck a deal to buy Virgin Money for £2.9 billion to create a lender with 25 million customers and almost 700 branches.
The building society has promised to keep all Virgin Money branches open for at least four years as part of the takeover.
Virgin Money chief executive David Duffy will be replaced by Nationwide chief financial officer Chris Rhodes following the merger.
Richard Branson’s Virgin Group, which owns a 15 percent stake in the bank, has agreed to vote in favor of the deal.
Nationwide will continue to use the Branson brand until at least 2030, but the Virgin Money name will eventually disappear from the High Street.
Branch commitment: Nationwide has agreed a deal to buy Virgin Money for £2.9 billion and has promised to keep all Virgin Money branches open for at least four years as part of the takeover.
The deal will create a combined group with approximately 24.5 million customers, more than 25,000 employees and nearly 700 branches.
Following the acquisition, Nationwide will have total assets of approximately £366.3 billion and loan advances of approximately £283.5 billion.
Nationwide revealed yesterday that it had extended its promise to keep all its sites open by two years, meaning it would not close any stores until early 2028.
He also announced that the commitment would apply to all 91 Virgin Money branches.
Nationwide chief Debbie Crosbie, pictured, said: “This acquisition strengthens Nationwide and means we can offer more value and broader services.
“More people will benefit from the benefits of mutual ownership and the customer-focused approach of a building society.
“This includes Nationwide’s Single Leg Promise, which we are extending until at least early 2028.
The promise will also apply to Virgin Money branches. Virgin Money shareholders will receive 220 pence per share under the terms of the deal, a 38 per cent premium to the bank’s closing price before the offer was announced earlier this month.
The bank’s customers will not automatically become Nationwide members until at least 12 months after the deal closes, but some will transfer “in the medium to long term”.
Russ Mould, investment director at AJ Bell, said: “You can never rule out someone else jumping into the ring, but Nationwide seems pretty comfortable at the moment with getting its offer.”
Branson, pictured, founded Virgin Money in 1995. She bought Northern Rock from the government after the financial crisis. It was bought by Clydesdale and Yorkshire Bank for £1.7 billion in 2018, but the name has endured.
The deal comes after Barclays announced last month it would buy Tesco’s banking business as the lenders sought to consolidate their market share.
