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Teaching activity

In the News Teaching Activity – Nationwide is planning to takeover Virgin Money (Mar 2024)

Elizabeth Veal

14th March 2024

The Nationwide building society is looking set to take over Virgin Money, ensuring that the Nationwide remains the second largest mortgage lender in the UK. Nationwide could become an even stronger competitor in banking, challenging the position of the UK’s ‘big four’ banks.

There is big news in the banking sector with the potential merger between Nationwide and Virgin Money due to be approved in April. The planned takeover by Nationwide of Virgin Money is set to create some strategic advantages for the mutual building society in terms of its market positioning and mortgage lending strength. Synergy from the combination of these financial institutions could mean some potential cost savings. However, the merger is not without some challenges such as phasing out the Virgin Money brand. Some workers may lose out with likely job cuts for some bank workers. Richard Branson looks set to boost his income to the tune of £414 million from this potential merger, but there is still a need for regulatory and shareholder approval for it to go ahead.

Nationwide to buy Virgin Money in £2.9bn deal | Nationwide | The Guardian

1 Explain the type of business integration that the Nationwide takeover of Virgin Money is.

2 What are the advantages of business mergers? Which of the advantages are most applicable to the Nationwide-Virgin Money merger?

3 What are the disadvantages of business mergers? Which of the disadvantages are most applicable to the Nationwide-Virgin Money merger?

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Elizabeth Veal

Liz has taught Economics for over 25 years, including several years as Head of Economics at leading schools.

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