The Competition and Markets Authority (CMA) has approved Nationwide's £2.9bn takeover of Virgin Money, concluding that the deal will not substantially reduce competition in the mortgage and credit card markets. The regulator announced its decision on Friday, marking the largest banking merger since the financial crisis.
The CMA's phase 1 investigation examined whether the combined entity would lessen competition, but found that sufficient competition would remain. The watchdog also engaged with the Financial Conduct Authority and the Prudential Regulation Authority during its assessment.
Virgin Money shareholders voted overwhelmingly in favour of the 220p-a-share offer in May, with 89% backing the deal. This included support from Sir Richard Branson, who owns a 14.5% stake and stands to receive £724m. Nationwide members were not given a specific vote on the transaction, though over 600,000 backed all resolutions at the AGM despite protests.
Debbie Crosbie, Nationwide's chief executive, said: 'We remain on course to receive all the necessary approvals to complete the deal in the final three months of this year.' Virgin Money welcomed the CMA's unconditional clearance, stating the enlarged group would combine complementary businesses to offer more products and services.
Since the deal was announced on 7 March, Virgin Money's share price has risen 35% to over 215p. Nationwide will pay £15m annually in royalties to use the Virgin brand for four years, then £250m to exit the contract, eventually phasing out the Virgin Money name.
