Tesco has privately agreed to buy out Royal Bank of Scotland’s share of their Tesco Personal Finance joint venture in a deal estimated to be worth close to £1 billion.
The supermarket giant made an informal offer for RBS’s 50% stake several weeks ago. Although the bank initially rebuffed the approach, it is understood that talks began last month and a deal has now been agreed in principle.
Under the terms of the deal, RBS would continue to provide banking services to Tesco Personal Finance during a handover period. Tesco would then apply for its own banking licence from the Financial Services Authority.