CYBG to acquire Virgin Money for £1.7bn in shares

Cornelia Mascio
Giugno 18, 2018

The deal will see all of Yorkshire Bank, established in Halifax in 1859, and Clydesdale Bank's retail customers move to the Virgin Money brand.

Virgin Money was formed in a partnership between Virgin Direct and Norwich Union in 1995, and its Norwich office in Whiting Road is home to its in-house design studio.

The combined group will have around six million customers, making it the UK's sixth largest bank.

The owner of the Clydesdale Bank, Yorkshire Bank and B brands said the agreement would see each Virgin Money share exchanged for 1.2125 shares in the new combined group. It slightly sweetened its all-stock proposal earlier this month by offering Virgin Money shareholders more of the merged company.

The all-shares deal, worth the equivalent of Dollars 2.3 billion or 1.9 billion euros, will see the combined group adopt the Virgin Money brand over the next three years, the pair said in a statement that indicated about 1,500 job losses. It will have 9,500 employees, 250 branches and total lending of £70bn.

The firms said they recognise "that there will be a loss of jobs" as a result of the takeover, likely to number around 1,500.

That is why the Open Banking scheme - opening traditional accounts to specialist services from smaller players - appeared to be a potential game changer for fintechs and banking upstarts.

With this deal, the focus shifts to a more traditional form of competition - growing a business to a sufficient size to take on the incumbents at their own game.

The banks said that the deal would effectively bring the combined group out of the challenger market, making it a real competitor to leading lenders.

He added that "technology and agility" were the factors that would decide the future of banking.

CYBG CEO David Duffy, who will lead the new lender with Virgin Money CEO Jayne-Anne Ghadia acting as a senior advisor for an unspecified period of time, said the deal will create a bank with the capability to take on the largest players.

"We can be agile enough to deliver a much better deal for the customer".

Altre relazioniGrafFiotech

Discuti questo articolo

Segui i nostri GIORNALE