Nationwide Building Society has confirmed that it will acquire Virgin Money for a cash consideration of £2.9bn, with each share valued at 220 pence.

In an announcement by the building society, the boards of both firms said that they believe the acquisition will create the "second largest provider of mortgages and savings in the UK".

As a result of the takeover, chief executive officer at Virgin Money, David Duffy, will step down from his position upon deal completion.

Furthermore, as part of the review, Nationwide has revealed that it intends to "assess the workforce requirements of the combine group", which could lead to job losses.

Chief executive officer at Nationwide, Debbie Crosbie, said: "This acquisition strengthens Nationwide and means we can offer more value and broader services for our current and future members. More people will experience the benefits of mutual ownership and the customer-focused approach of a building society. This includes Nationwide's unique branch promise, which we are extending until at least the start of 2028. The promise will also apply to Virgin Money branches."

Investment director at AJ Bell, Russ Mould, commented: "After the miserable performance of Virgin Money on the market, shareholders might welcome the chance to get out at a small premium.

“You can never rule out someone else throwing their hat into the ring, but Nationwide is looking fairly comfortable for now with getting its offer over the line."

Nationwide did not offer its own members a vote on the acquisition, leading to some observers viewing the deal as controversial.

However, the takeover will still need approval from Virgin Money shareholders, with its largest investor, Sir Richard Branson, indicating that he will back the takeover.

Chairman at Nationwide, Kevin Parry, added: "Following full consideration and the appropriate due diligence, and after taking comments from members into account, the Board of Nationwide's assessment is that the binding offer to acquire Virgin Money is in the best interests of the Society and its present and future members."

CEO at Virgin Money, David Duffy, concluded: "The proposed combination with Nationwide presents an exciting opportunity to build on Virgin Money's significant strategic and operational progress, including the consistent growth in our retail and business customers, deposits and target lending. Together the combined group can offer more great products and services to a larger customer base."

---