CYBG acquires Virgin Money for £1.7bn
CYBG has reached a takeover deal with Virgin Money that values the bank at £1.7bn (€1.9bn) but is likely to lead to more than 1,500 job losses.
The owner of the Clydesdale Bank, Yorkshire Bank and B brands said the terms of the agreement will see each Virgin Money share exchanged for 1.2125 shares in the new combined group.
The deal values each Virgin Money share at around 371p each and the entire group at £1.7bn.
CYBG's David Duffy will stay on as chief executive, leaving Virgin Money boss Jayne-Anne Gadhia to serve in a consultancy role as his senior adviser.
The group - which will have its headquarters in Glasgow - will see CYBG's Jim Pettigrew continue on as chairman alongside finance chief Ian Smith.
The firms said they recognise "that there will be a loss of jobs" as a result of the takeover, likely to number around 1,500.
The bulk of the cuts will affect senior management positions, as CYBG has said there is "very little in overlap" in customer-facing roles
"As a result of the significant operational overlap between CYBG and Virgin Money, the combined group will be able to reduce the duplication of roles, leading to a decrease in the total number of FTEs (full-time employees).
"It is currently expected that the total number of FTEs of the combined group, being approximately 9,500 FTEs, will reduce by approximately 16pc, some of which will take place via natural attrition."
Ms Gadhia said she had "obtained assurances from CYBG regarding our employees" as well as its Gosforth headquarters but did not provide further details.
"The combination of Virgin Money with CYBG will have greater scale to challenge the big banks.
"It will also accelerate the delivery of our strategic objectives, particularly the expansion of the products we offer to customers."
The Virgin Money boss added: "This is a compelling deal for our shareholders, that accelerates value delivery and represents the beginning of the next chapter of the Virgin Money story."