Nationwide Building Society to Acquire Virgin Money in Landmark Deal

Nationwide Building Society has announced a groundbreaking acquisition agreement with Virgin Money, solidifying its position as the UK’s second-largest mortgage lender. The deal, valued at £2.9bn, will see Virgin Money being taken over by Nationwide.

The acquisition is set to trigger the resignation of Virgin Money CEO David Duffy, with Nationwide’s Chief Financial Officer, Chris Rhodes, poised to take on the leadership role at Virgin Money post-takeover. Nationwide’s chair, Kevin Parry, expressed confidence in the deal’s benefits for both societies and their members.

The takeover proposal requires approval from Virgin Money shareholders, with key investor Richard Branson signaling his support for the acquisition. Branson is set to receive a substantial windfall from the deal, including funds from the sale of his stake in Virgin Money and the use of the Virgin Money brand by Nationwide.

Nationwide emphasized the importance of the Virgin Money brand in the bank’s evolution but discussed plans for a gradual rebranding strategy post-acquisition. The deal, initially rebuffed by Virgin Money’s board, progressed through several revised proposals before reaching the 220p per share bid.

While Nationwide aims to maintain workforce stability in the short term, some workforce changes will be necessary to streamline operations and address overlapping roles. The extension of Nationwide’s ‘branch promise’ to include Virgin Money branches showcases the commitment to preserve branch networks.

Following the acquisition, Virgin Money will operate semi-autonomously for six years under the leadership of Chris Rhodes, reporting directly to Nationwide’s CEO, Debbie Crosbie. Discussions regarding incentive arrangements for Virgin Money management post-acquisition are underway.