The Competition and Markets Authority has launched a probe into Nationwide’s £2.9bn takeover bid for Virgin Money, which will create the second-largest mortgage lender in the UK.
The watchdog says its investigation will examine whether the move will “result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services”.
It will accept comments from interested parties from today until 14 June – and plans to publish an initial decision on 26 July.
The body says its probe will be guided by whether the merger complies with the Enterprise Act 2002.
Earlier this month, Virgin Money shareholders voted by an 89% majority to accept the mutual’s takeover offer.
The firms aim to complete the sale by the end of the year.
The surprise deal, announced in March, will see Nationwide offer the Virgin Money shareholders 218p in cash and a 2p dividend to be paid in this financial year, or, if earlier, shortly before the completion of the takeover.
The offer was a 38% premium to Virgin Money’s 159.1p closing price of pence on 6 March, the day before the deal was announced.
Nationwide plans to terminate the Virgin brand after four years and will rebrand the bank over the following two years.
Nationwide members do not have a vote on the deal.
