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- The acquisition will create an expanded business with around 24.5 million customers.
- Both the PRA and FCA have given their “necessary consent” for the £2.9bn merger.
Nationwide’s acquisition of Virgin Money could go ahead as early as next month after financial regulators gave their approval.
Both the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) have given their “necessary consent” for the £2.9bn merger, the two lenders announced to investors.
The deal has already received approval from the Competition and Markets Authority and Virgin Money shareholders, including Sir Richard Branson, the company’s largest investor and a prominent businessman.
Merger: Nationwide’s acquisition of Virgin Money could go ahead next month
Branson, who owns a 14.5 per cent stake in Virgin Money, will receive around £650m for the acquisition.
Many Nationwide members demanded a vote on the deal, but the building society refused, arguing that it was not legally necessary and would be impossible to carry out in a short period of time due to its huge membership base.
But the acquisition still needs court approval, with a hearing expected to take place on September 27.
If the court gives its consent, the lenders expect the deal to be completed by October 1.
“The acquisition will not require any immediate changes to the capital structure of Virgin Money Group or the combined group as a whole,” the lenders said.
The planned acquisition, initially agreed in March, will create an expanded business with around 24.5 million customers, more than 25,000 employees and around £366.3 billion of total assets.
Nationwide has also committed to keeping all Virgin Money branches open for at least four years and continuing to use the Virgin brand until at least 2030.
In addition, the group’s deputy financial director, Muir Mathieson, has replaced Chris Rhodes as CFO.
Rhodes, who joined Nationwide in 2009 from Abbey Santander, will remain on the company’s board until he succeeds David Duffy as Virgin Money chief executive.
Founded in 1995 in partnership with Norwich Union, later renamed Aviva, Virgin Money has grown to become the UK’s sixth largest retail bank.
It bought Northern Rock for £747m in 2011, four years after the Newcastle-based lender was nationalised when it nearly collapsed during the early stages of the credit crisis.
Virgin Money was bought seven years later for £1.6bn by CYBG, the owner of Clydesdale Bank and Yorkshire Bank.
In the three months to June, the firm’s customer lending levels fell 0.9 per cent to around £72 billion, but its deposits rose 3.8 per cent to £69.8 billion.
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