Virgin Money buys Northern Rock

Virgin Money has agreed to buy the bank Northern Rock from Her Majesty's Treasurer at a loss to both UK taxpayers and private wealth investors.

The deal is expected to be finalised on January 1st 2012 subject to regulatory and EU merger approval.

A private wealth investment consortium led by Virgin Group and WL Ross & Co has raised £747 million to pay the government for the bank.

The government originally bailed out Northern Rock in 2008, injecting £1.4 billion into the troubled lender and dividing it into two.

Sir David Clementi, chairman of Virgin Money and soon the combined brand, said: "Returning Northern Rock to private ownership is an important step in rebuilding the UK banking sector, as well as an outstanding opportunity to enhance competition and financial stability whilst protecting jobs and the economy in the north-east of England."

Other expected benefits of the acquisition include the fact the business will grow so there will be no compulsory redundancies and it is good for the north of the country as the headquarters will be in Newcastle.
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