CMA probes Nationwide swoop on Virgin Money

Debbie Crosbie is leading Nationwide’s bid for Virgin Money (pics: Terry Murden)

Competition watchdogs has launched a preliminary investigation into the proposed acquisition by mutually-owned Nationwide Building Society of listed bank Virgin Money UK.

The Competition and Markets Authority said it is considering whether the tie-up will result in a “substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”

The CMA is seeking comments on the merger before 14 June and has set a deadline of 26 July for its Phase 1 decision on whether to move to a more formal investigation.

On 22 May about 89% of Virgin Money UK shareholders voted in favour of a £2.9 billion cash takeover by Nationwide. Yhe 220p-a-share offer includes a planned 2p-per-share dividend payout.

The shareholder vote passed the 75% threshold required. Nationwide rejected a plea by a minority of members to hold a similar vote.

Virgin Money chief executive David Duffy will stand down on completion of the deal, which is expected during the final three months of this year, while Nationwide boss Debbie Crosbie, a former executive at Virgin Money [known at the time as Clydesdale Bank] will head up the enlarged group.

The deal will bring together Britain’s fifth and sixth largest retail lenders, creating a combined group with around 24.5 million customers, more than 25,000 staff and nearly 700 branches.

It will mean eventually see the disappearance of the Virgin Money brand, with Nationwide planning to rebrand the business within six years.

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