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Nationwide to buy Virgin Money for £2.9 billion

Nationwide to buy Virgin Money for £2.9 billion

Nationwide has struck a deal to buy Virgin Money for £2.9 billion in a move that would see the building society expand into business banking and present a challenge to the might of the four big high street banks.

The surprise deal would pair the UK's biggest building society with more than 17 million customers, with Virgin Money, the sixth largest retail bank with around 6.6 million customers and 91 branches.

The 220p-a-share price offered by Nationwide is 38% higher than Virgin Money's closing position at end of play on Wednesday.

The combined group would have 696 branches, second only in the UK to Lloyds Banking Group. It would also become the country's second largest mortgage and savings group by market share.

No material changes to the size of Virgin Money's 7,300-strong workforce were expected "in the near term", Nationwide says.

In a message to members, Nationwide chairman Keving Parry says: "If the acquisition proceeds, it will accelerate our strategy and create a stronger and more diverse business that is better placed to deliver financial value to our members, both now and in the future.

"The combination of our businesses would put us in a stronger position to continue to provide Fairer Share Payments to our eligible Nationwide members, better value mortgages and savings, and leading customer service. Over time, we would aim to provide a wider range of products and services to our customers and members, including Virgin Money’s well-established business banking services."

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