Nationwide Building Society is considering buying Virgin Money for £2.9bn, which would create one of the largest mortgage and savings providers in the UK.
If approved by shareholders, the deal would create a group with 696 branches, making it the second-largest mortgage and savings provider behind Lloyds Banking Group.
Nationwide expects to retain Virgin Money’s 7,300 full-time equivalent employees. The two brands would be run as separate legal entities and the Virgin Money brand will be retained for about six years.
Mergers and acquisitions
Nationwide said it valued the skills and experience of Virgin Money’s staff and believes the potential acquisition would be an opportunity to “harness the talent of this group”.
“Nationwide would be committed to helping Virgin Money’s people be at their best and thrive, leveraging the existing colleague proposition – one that seeks to promote a high-performing, purpose-driven culture, which helps colleagues feel supported and develop rewarding careers,” it said.
“Nationwide does not intend to make any material changes to the size of the Virgin Money employee base in the near term, and would safeguard the existing contractual and statutory rights of Virgin Money employees, including pension arrangements and redundancy policies.”
Nationwide CEO Debbie Crosby said: “Nationwide will remain a building society, and a combined group would bring the benefits of fairer banking and mutual ownership to more people in the UK, including our continuing commitment to retain existing branches, as part of our ‘Branch Promise’ and leading levels of customer service.
“We believe the combination would create a stronger and more diverse business that will be better placed to deliver value to our members and customers, both now and in the future.”
Virgin Money UK CEO David Duffy said: “This potential transaction with Nationwide represents an exciting opportunity to build on the significant progress we have made in becoming the only new Tier 1 bank in recent history. The combined scale and strength would expand our customer offering and complete our journey in the banking sector as a national competitor.”
Virgin Money was formed in 2012, following the acquisition of Northern Rock, and merged with Clydesdale Bank in 2019.
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