Branson is giving up £100 million he would receive from Nationwide for use of the Virgin Money brand

Sir Richard Branson has agreed to part with more than £100 million he was entitled to from Nationwide Building Society for the use of the Virgin Money brand in its £2.9 billion takeover of the bank.

Known for his strict licensing agreements that give companies the right to use the Virgin name across sectors, Branson has already secured a £250 million “exit fee” that will allow Nationwide to discontinue the Virgin brand six years after the deal is completed. However, undisclosed sources indicate that Branson could have received an additional substantial payout to cover royalties for a period of up to forty years, possibly an additional £100 million, based on a complex formula set out in a 2018 brand licensing agreement .

While Branson's decision to forego the additional payment may lead to speculation about Nationwide's negotiating tactics, he still stands to benefit financially. Branson is expected to receive around £700 million from Nationwide's delisting from the stock market, including the £250 million exit fee, £60 million over four years for the continued use of the brand, and £400 million for his 14 stake .5%. in the bank.

Virgin Money, as it exists today, was founded in 2018 when CYBG acquired Virgin Money and adopted its brand. Branson has been praised for his vigilant protection of the Virgin brand, typically through licensing agreements facilitated by Virgin Enterprises. These agreements allow companies to use the Virgin name even if Branson's group does not have a controlling interest in the company.

Some financial industry observers speculated that the branding deal with Virgin Money could deter potential bidders for the bank. However, the details of this arrangement were set out in the prospectus issued at the time of CYBG's acquisition of Virgin Money.

Branson's business empire has previously tested such agreements in legal battles. For example, a brand deal between Virgin and Brightline, a Florida-based train operator, included an exit fee of up to $200 million (£160 million).

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