October 14 2018 @ 15:28 by Chloe Holmes
The £1.7 billion takeover of Virgin Money by CYBG has been given approval by regulators. Both groups confirmed that the deal has been ratified by both the Financial Conduct Authority (FCA) and the Prudential Regulation Authority.
Last month, the shareholders of each company voted overwhelmingly in favour of the all-share takeover, which was then presented to regulators for approval. As the news was announced, shares in Virgin Money rose by 2.51% to 9.25p and CYBG shares increased by 1.2% to 313.3p.
CYBG already owns the Clydesdale and Yorkshire Banks, and this deal will push their customer base to around 6 million, making them the sixth-largest bank in the UK. The combined group will rebrand itself as Virgin Money and retail customers will be transferred over the next three years.
The new group will be headquartered in Glasgow but has made a commitment to keep a “substantial base of operations” at Virgin’s Gosforth offices for at least three years.
There will be approximately 9,500 employees when the takeover goes through, but CYBG has already announced plans to downsize this by around a sixth. Most of these role reductions are planned to come from duplicated senior management and central function roles.
The companies said, in a statement: “The offer was made subject to the[…] receipt of the relevant approvals from the Financial Conduct Authority (the FCA) and the Prudential Regulation Authority (the PRA). Virgin Money and CYBG are pleased to confirm that the FCA and the PRA gave written notice to CYBG, Virgin […] of their approval of the acquisition.
“The Scheme remains subject to certain conditions, including sanction by the Court at the Court Hearing and the delivery of a copy of the Court Order to the Registrar of Companies.”