The competitions regulator has announced it is investigating Nationwide Building Society’s proposed £2.9bn takeover of North East challenger bank Virgin Money.
The Competition and Markets Authority (CMA) have launched a merger inquiry into the deal – the biggest 海角视频 banking merger since the financial crisis – inviting interested parties to give their views over the next two weeks. Swindon based Nationwide first tabled a takeover of Virgin Money in March, with a 220p per share offer, and the pair have since firmed up a preliminary agreement after the boards of both lenders approved the deal.
The move is hoped to be completed later this year, bringing together the country’s fifth and sixth largest retail lenders to create a combined group of 25,000 staff and 700 branches serving 24.5m customers. However the CMA said it is now considering whether the deal could “result in a substantial lessening of competition” within the 海角视频 market. The organisation will decide whether the deal needs a more thorough probe by July 26.
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Last week, a majority of 89% of Virgin Money shareholders voted in favour of the transaction which has helped 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 lead the merged group.
The deal would see the Virgin Money brand disappear from the high street and its online offering, as Nationwide plan to rebrand the Virgin Money business as Nationwide within six years, although it will keep the two brands initially.
A number of brokers have commented on the proposed takeover, including Justin Moy, MD at EHF Mortgages, who said: “The amalgamation of these lenders won’t create a lender of the same size as the powerhouse that is Lloyds Banking Group. I believe having a few less lenders in the market will actually help borrowers and brokers if it creates the infrastructure to bring better products to market.”
Ben Perks, MD at Orchard Financial Advisers added: “Two lenders with different skills coming together could lead to the creation of a Super Lender, with a wider range of options available to clients. It could be a great disrupter within the industry and force other lenders to think differently. On the other hand, it reduces the lenders in the market and if it works could encourage others to do the same. Less choice is ultimately a bad thing for borrowers.”