- CMA to investigate if deal could result in ‘substantial lessening of competition’
Britain’s competition regulator will launch an initial probe into Nationwide Building Society’s £2.9billion takeover of Virgin Money UK.
The Competition and Markets Authority said it’s exploring whether the deal, which will create Britain’s second-largest savings and mortgage provider if approved, could result in a ‘substantial lessening of competition’ within any UK market.
The potential takeover, announced in March, has already attracted criticism after Nationwide refused to give its members a vote on the deal.
Nationwide-Virgin Money UK tie-up will create Britain’s second-largest savings and mortgage provider if approved
Virgin Money UK’s biggest independent investor, fund management firm Allan Gray, agreed members should have had a vote on the deal, which it slammed as being ‘likely to sell shareholders very short’.
When the deal was announced, analysts had suggested it could actually improve competition in the UK mortgage and savings market.
For their part, Nationwide and Virgin Money UK insist the deal will leave the combined group ‘better placed to deliver value to our members and customers, both now and in the future’.
But the CMA is inviting comment on the deal as it launches the first stage of an investigation.
The regulator now has until 26 July to decide whether a deeper ‘phase 2’ investigation will be warranted.
Nationwide and Virgin Money UK declined to comment on the CMA probe, expectations of which were cited in previous investor communications on the deal.