CMA to examine Nationwide-Virgin merger

Nationwide Building Society’s planned acquisition of Virgin Money is to be investigated by the UK’s competition watchdog.

The Competition and Markets Authority (CMA) informed the two companies on Friday that it was launching a Phase 1 inquiry to determine whether the proposed merger would lead to “a substantial lessening of competition”.

Interested parties are invited to submit comments, with the consultation period closing on 14 June.

Under the preliminary agreement announced in March, Nationwide will pay 220p in cash per Virgin Money share. The £2.9bn deal would see the Virgin Money brand retained for around six years.

Shareholders of Virgin Money voted in favour of the proposal in May.

Nationwide is UK’s biggest building society with more than 17 million customers, while Virgin Money is the UK’s sixth largest retail bank with around 6.6 million customers.

The combination of the two businesses would create the second biggest provider of mortgages and savings in the UK.

The CMA will decide by 26 July whether to refer the merger for an in-depth Phase 2 investigation.