- Virgin’s board backed a £1.7bn bid by Clydesdale and Yorkshire Banking Group
- The tie-up will see the combined business rebranded as Virgin Money
- In return for rights to the brand Branson will get at least £15m a year in royalties
Sir Richard Branson will make £15million a year from the sale of Virgin Money – while 1,500 staff lose their jobs.
Virgin’s board backed a £1.7billion takeover by Clydesdale and Yorkshire Banking Group that will be followed by a wave of cost cutting.
The tie-up will see the combined business rebranded as Virgin Money, meaning the 159-year-old Yorkshire Bank and 180-year-old Clydesdale Bank names will vanish from the High Street.
Sir Richard Branson will make £15million a year from the sale of Virgin Money – while 1,500 staff lose their jobs
In exchange for rights to the brand, Virgin founder Branson will get at least £15million a year in royalties when the merger is complete. The 67-year-old businessman will also have a 13per cent holding in the combined group worth around £575million.
Bosses insisted that most of the 1,500 jobs due to go will be head office roles, with few branches set to shut as part of efforts to save £120million a year.
They admitted some outlets will disappear from the group’s total of 243, but stressed this will only account for £15million of the savings.
Clydesdale and Yorkshire chief operating officer Debbie Crosbie said: ‘There are some obvious areas of overlap where we will have two branches on the same High Street. There will be minimal closures.’
The merged company will have around 6m customers and 9,500 staff, although this number will be reduced by about a sixth or around 1,500.
The deal, however, must be separately approved by 75per cent of Virgin Money and Clydesdale and Yorkshire shareholders.
Where next for Virgin Money boss Gadhia?
Virgin Money’s boss will step down from its board – but walks away with shares worth £12.5million.
Jayne-Anne Gadhia, 56, will swap her 3.4million shares in Virgin Money for stock in the new business.
Gadhia will stay on temporarily as a consultant during the merger but as the City’s most senior woman in banking, the mother-of-one is sure to face questions about what she could do next.
One option might be TSB, where boss Paul Pester is under pressure. There will also be talk of a move to Lloyds or RBS.