Virgin Money bought by CYBG for £1.7bn

Branson owns 35 percent of Virgin Money.

Under the terms of the deal, Virgin Money shareholders will get 1.2125 new CYBG shares for every Virgin Money share they hold.

The owner of the Clydesdale Bank, Yorkshire Bank and B brands said the agreement would see each Virgin Money share exchanged for 1.2125 shares in the new combined group.

Like Duffy, CYBG's chairman, Jim Pettigrew and its finance director Ian Smith will all retain their roles in the combined group.

It said some of those job losses would be achieved "via natural attrition".

The newly enlarged operation will be headquartered in Glasgow and is now being seen as a potential competitor to established giants such as Barclay's and RBS with a newly created customer base of about 6 million.

"It will also accelerate the delivery of our strategic objectives, particularly the expansion of the products we offer to customers".

Virgin Money's shares rose 2.4% to 363.4 pence as of 8.08 am in London.

"By combining two of the UK's leading challenger banks, we will create a national, full-service bank with the capabilities needed to compete effectively with the large incumbent banks", he said further.

"The combination of CYBG and Virgin Money will create the first true national competitor to the status quo in United Kingdom banking, offering a genuine alternative for consumers and small businesses", said CYBG chief executive David Duffy.

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.

Rob MacGregor, a national officer at Unite, said: "The purchase of Virgin Monday by Clydesdale and Yorkshire Bank will change the face of banking in many high streets across the country". It slightly sweetened its all-stock proposal earlier this month by offering Virgin Money shareholders more of the merged company.

It will create Britain's sixth-largest bank by assets, around twice the size of its largest rival and with the firepower of the Virgin brand, which the combined group will pay a royalty to keep.