Competition regulator to investigate Nationwide takeover of Virgin Money

A proposed merger between Nationwide and Virgin Money is to be subject to an investigation by the competition watchdog.

The UK’s biggest building society revealed the £2.9bn deal with its rival in March. If it goes ahead, it will create the second largest provider of mortgages and savings in the UK.

The Competition and Markets Authority (CMA) has confirmed it will examine whether the takeover would result in a substantial lessening of competition in the UK banking sector.

This deal would form a combined group with 700 branches – second only to Lloyds Banking Group. And the combined assets of the groups would total around £366.3bn.

Virgin Money is the UK’s sixth largest retail bank with about 6.6 million customers. Swindon based Nationwide has almost 18 million customers.

Last week, Virgin Money shareholders voted to accept Nationwide’s offer, despite fears from some investors that the deal might “sell shareholders very short”.

The CMA has set a 40-day deadline for the first stage of its probe. It will assess whether the deal constitutes a “relevant merger situation” and if it could lead to a substantial lessening of competition.

The CMA is inviting comments from interested parties, with its consultation period ending on 14 June.

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