Nationwide to buy Virgin Money in £2.9bn deal

Nationwide Building Society has agreed to buy Virgin Money in a deal that values its high street rival at nearly £3bn and would create the second-largest provider of mortgages and savings in the UK.

The two lenders have reached a preliminary agreement on the key terms of a deal, which would create a new competitor with £366bn in total assets, according to a joint statement released on Thursday morning.

The proposed £2.9bn deal offers Virgin Money shareholders 220p a share and represents a 38% premium on the lender’s share price on Wednesday.

The deal comes just five years after the company’s last merger, when Clydesdale and Yorkshire Banking Group launched its £1.7bn takeover of Virgin Money in 2018.

Nationwide said in a statement that it believed the potential takeover would “enable Nationwide to accelerate its strategy and broaden and deepen its products and services faster than could be achieved organically, whilst providing a return that would further support Nationwide’s financial strength and deliver greater value to its customers and members”.

More details to follow …