Virgin Money’s £3 billion nationwide deal comes under UK antitrust scrutiny

(Bloomberg) — Nationwide Building Society’s 2.9 billion-pound ($3.7 billion) deal to buy Virgin Money UK Plc will be scrutinized by Britain’s merger watchdog.

The Competition and Markets Authority said on Friday it had started the first stage of the merger process to examine whether the merger raises any competition concerns. The agency invited market players to express their comments.

The deal brings together the UK’s sixth largest retail bank by total assets and its largest building society, thereby creating the UK’s second largest home loan provider, placing the combined company only behind Lloyds Banking Group Plc.

Under the terms of the deal announced on March 21, Virgin Money shareholders are to receive 220p per share from Nationwide, including 218p in cash and 2p in the proposed dividend.

The CMA has until July 26 to decide whether to refer the deal for a detailed investigation.

(Transaction details update)