In a significant £2.9 billion (US$3.72 billion) deal, Virgin Money will be acquired by Nationwide, a leading building society in the UK.

Following the transaction, Virgin Money will eventually completely vanish when Nationwide progressively takes over the finance division of Sir Richard Branson's Virgin Group business.

After the transaction closes, Nationwide will rank as the second-largest mortgage and savings business in the United Kingdom.

Nationwide: Using Virgin's acquisition to scale digital offerings

Despite the agreement, Nationwide will not be making any significant changes to Virgin Money anytime soon, which will relieve some of its 7,300 workers.

After the proposed merger is finalized, Nationwide now intends to phase down the Virgin Money brand over the next six years, contrary to its previous assurance that it will continue to use the brand.

In fact, if Nationwide's acquisition of Virgin Money closes, it will surpass the largest buyout of a UK bank since Northern Rock's 2008 collapse, which was later acquired by Virgin Money in 2012.

Additionally, the deal would be larger than the previous US$757 million acquisition agreement that Barclays struck with Tesco Bank.

With nearly 18 million members, Nationwide is currently the largest building society in the UK, while Virgin Money serves 6.6 million members.

With 696 branches across the UK as a result of the merger, Lloyds Banking Group will be the only organization with a greater physical presence in the nation.

In contrast to the majority of established financial institutions that are progressively withdrawing from towns and cities, Nationwide, as a building society, has promised to maintain a branch in every area where the two companies are located until at least 2026.

Through the agreement, Nationwide will have access to Virgin Money's digital capabilities and be able to extend its member base by providing new goods and services to clients.

"[The deal] would bring the benefits of fairer banking and mutual ownership to more people in the UK," says Debbie Crosbie, CEO of Nationwide.

This includes savings and mortgage rates that are higher than the market average in the UK.