According to BBC, as a result of the deal, all the group’s retail customers will be moved to Virgin Money over the next three years. It will become the U.K.’s sixth-largest bank, with about six million customers.
While the combined group, which will be based in Glasgow, would have about 9,500 employees, CYBG revealed that it will be eliminating around 1,500 jobs. With that in mind, Unite the Union expressed “deep unease” over the deal, adding it was “vital that the skilled and experienced workforce are given assurances that branches and contact centres will not be closed.”
The deal gives CYBG permission to license the Virgin Money brand for £12 million a year, and later going up to £15 million. Sir Richard Branson’s Virgin Group is Virgin Money’s biggest shareholder, holding a 34.8 percent stake in the business.
In addition, the deal gives Virgin Money shareholders 1.2125 new CYBG shares for every Virgin Money share they hold, which will give them about 38 percent of the combined business.
CYBG said the acquisition would “bring together the complementary strengths of two successful challenger banks to create the U.K.’s first true national competitor to the large incumbent banks.”
“We’re going to become a competitor of scale,” said CYBG CEO David Duffy in an interview, adding that “technology and agility” were factors that would decide the future of banking. “I think we have sufficient scale – the brands, the product and the technology. We can be agile enough to deliver a much better deal for the customer.”
Duffy will stay in his current position in the combined group, as will CYBG Chairman Jim Pettigrew. Virgin Money CEO Jayne-Anne Gadhia has agreed to stay on as a consultant for a limited time after the deal is completed.