Virgin Money agrees £2.9bn proposed takeover by Nationwide

High street lender Virgin Money has agreed a £2.9bn proposed takeover by Nationwide Building Society in a move set to create the UK’s second largest mortgage and savings group.

Virgin Money, which bought Clydesdale Bank in 2018, employs a workforce of around 3,000 people at is head office in Glasgow. Nationwide said it doesn’t intend to change staffing at the headquarters “in the near term”.

Nationwide has put forward a 220p-a-share approach for Virgin Money, including a planned 2p-per-share dividend payout, which it said is a 38% increase on Virgin Money’s closing share price on Wednesday.

The companies said they had reached a preliminary agreement on the deal, with Nationwide now looking through Virgin Money’s books before making a firm offer.

The planned tie-up would create a combined lender worth around £366.3bn, with total lending and advances of about £283.5bn.

Nationwide said it does not intend to make any material changes to the size of Virgin Money’s 7,300-strong workforce “in the near term”.

Nationwide also stressed it will remain a mutual building society if the deal goes ahead and is given the green light by Virgin Money’s shareholders and Nationwide’s members.

But it revealed it plans to rebrand the Virgin Money business as Nationwide within six years, though it will keep the two brands initially.

Nationwide added it would keep a branch in each location where the combined group is present, until at least the start of 2026 and “values Virgin Money’s ongoing presence in Glasgow and Newcastle”.

Richard Lochhead, minister for small business, innovation, tourism and trade, said: “We are engaging with Nationwide and Virgin Money to establish the potential impact of this announcement.

“Virgin Money is an important employer in Glasgow and our priority will be to protect these skilled jobs.”