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Westpac and Virgin Money in credit card merger

Westpac and Virgin Money in credit card merger

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Date Published : Friday, April 04, 2008

Virgin Money has agreed a merger for its Virgin Credit Card in a $39 million deal with Australian firm Westpac Banking.

The deal will see Westpac pay the fee over the next 14 months until June 2009, with the company granted a special brand license to use the Virgin name for that period.

Chief executive officer for Virgin Money David Wakely comments: "The Virgin Credit Card established Virgin Money as a key player in the financial services market and created a great platform for Virgin Money to launch further financial products from.

"We believe the transaction ensures that customers will continue to receive the benefits of a great value credit card with very little disruption to their service."

In an additional contract clause, Virgin has agreed not to re-enter the credit and debit card market for the duration of the transfer, but will retain the right to expand its financial services portfolio, which includes Virgin Home Loans and Virgin Superannuation.

Virgin launched its credit card in 2003 with the backing of Westpac for an agreed five-year period, which has now expired.

The new deal comes with the assurance that existing customers will continue to be managed by Westpac Banking over the course of the expiry period for Virgin credit cards, after which they will be offered a "competitive replacement offer".

Virgin Money first announced it would seek a buyer for its credit card portfolio upon the expiration of its deal with Westpac in November 2007.

Another subsidiary of the Virgin group, the Virgin Megastore retail chain, was sold to Zavvi Entertainment for an undisclosed sum in September 2007.

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