CMA to investigate Nationwide’s planned £2.9bn takeover of Virgin Money

It has invited interested parties to give their views on the deal, setting a deadline of June 14 for responses.

It said it is considering whether the deal – which is the biggest UK banking merger since the financial crisis – could “result in a substantial lessening of competition” within the UK market.

The CMA said it will decide whether the deal needs a more thorough phase 1 probe by July 26. In March, Nationwide and Virgin Money reached an agreement over the deal.

Nationwide struck the takeover deal with a 220p-a-share offer for Virgin Money, including a planned 2p-per-share dividend payout.

Last week, a clear majority of 89 per cent of Virgin Money shareholders voted in favour of the move, helping to clear the path for the deal to complete.

Virgin Money chief executive David Duffy will stand down on completion of the deal, which is expected during the final three months of 2024, while Nationwide boss Debbie Crosbie will head up the enlarged group.

Speaking in March, Ms Crosbie said: “This acquisition strengthens Nationwide and means we can offer more value and broader services for our current and future members.

“More people will experience the benefits of mutual ownership and the customer-focused approach of a building society.”

Mr Duffy said: “The proposed combination with Nationwide presents an exciting opportunity to build on Virgin Money’s significant strategic and operational progress.”

The planned takeover 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.

But the move would spell the end of the Virgin Money brand, with Nationwide planning to rebrand the Virgin Money business as Nationwide within six years, although it will keep the two brands initially.

Virgin Money was formerly the Clydesdale and Yorkshire Bank group CYBG and rebranded after a £1.6bn takeover of Sir Richard Branson’s banking group in 2018.

Nationwide is Britain’s biggest building society with 605 branches and 18,000 staff and claims to have the UK’s single largest network of branches.

AJ Bell head of investment analysis Laith Khalaf, said: “Nationwide will be watching nervously as increasingly interventionist UK competition authorities weigh whether to escalate an initial probe into its deal for Virgin Money to a full-blown investigation. A decision is due in late July after submissions from the industry.”

Last week, Nationwide Building Society revealed it had delivered lower earnings over the past year but also handed out a record amount to its members. The building society reported a statutory pre-tax profit of £1.8bn for the year to April 4, which is down by about a fifth from the £2.2bn reported this time last year.

The lender said the decline was largely due to the £344m handed out to members in June last year, as well as it passing on interest rate rises to savers.