The boards of Virgin Money Holdings (UK) PLC and CYBG PLC have agreed the terms of a recommended all-share offer to be made by CYBG for Virgin Money.
The deal is expected to be worth around £1.7bn and the directors at CYBG believe the combination of CYBG and Virgin Money will bring together the complementary strengths of the two challenger banks to form a national competitor to the status quo.
Following the completion of the offer, Jim Pettigrew, chairman at CYBG; David Duffy, CEO at CYBG (pictured above); and Ian Smith, CFO at CYBG, will retain their current positions in the combined group.
In addition, Jayne-Anne Gadhia, CEO at Virgin Money, who has been in her current position for over 10 years, has agreed in principle to support the combined group as a senior adviser to the CEO (in a consultancy role) for a period of time beyond completion of the offer.
David said that the alliance offered a genuine alternative for consumers and small businesses.
“By combining two of the UK's leading challenger banks, we will create a national, full-service bank with the capabilities needed to compete effectively with the large incumbent banks.
“We are bringing together CYBG's 175-year heritage in serving retail and SME customers and advanced digital technology, with the iconic Virgin Money brand and consumer champion credentials.
“Together we will serve around six million customers, with the scale, capabilities and financial muscle to disrupt the status quo – and with a clear ambition to provide our customers with the best service in the UK.”
Jayne-Anne added: “When Virgin Money was established in financial services in 1995, we vowed to change the world of banking for good.
“We were the first UK financial services company to offer investment products directly to customers.
“We transformed the mortgage market and, as a result, saved customers hundreds of millions of pounds by introducing daily mortgage interest calculations.
“In January 2012, we successfully acquired Northern Rock and built a broader business from the solid foundations and wonderful people of the North East of England.
“We aim to offer good value to customers, treat employees well, make a positive contribution to society and create value for shareholders.”
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