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Probe launched into Aviva's £3.7bn takeover of Direct Line | Probe launched into Aviva's £3.7bn takeover of Direct Line |
(about 8 hours later) | |
Aviva's planned takeover of Direct Line is to be reviewed by the UK's competition watchdog, potentially setting back a £3.7bn deal. | Aviva's planned takeover of Direct Line is to be reviewed by the UK's competition watchdog, potentially setting back a £3.7bn deal. |
The two insurance firms agreed a major deal in December last year, but the Competition Markets Authority (CMA) said it was investigating whether a merger would result in a "substantial lessening" of competition in the insurance sector. | The two insurance firms agreed a major deal in December last year, but the Competition Markets Authority (CMA) said it was investigating whether a merger would result in a "substantial lessening" of competition in the insurance sector. |
The combined companies would make become a significant force in the car insurance sector, which has caught the attention of the CMA. | The combined companies would make become a significant force in the car insurance sector, which has caught the attention of the CMA. |
The watchdog will report its findings of the probe in July. | The watchdog will report its findings of the probe in July. |
If the Aviva and Direct Line deal goes ahead, it would boost its dominance in the insurance market against rivals such as Legal & General and Prudential. | |
Aviva shareholders would own about 87.5% of the new company while Direct Line shareholders would own about 12.5%. | Aviva shareholders would own about 87.5% of the new company while Direct Line shareholders would own about 12.5%. |
The combined company would result in an insurer with more than 20% of the share of home and motor insurance in the UK. | The combined company would result in an insurer with more than 20% of the share of home and motor insurance in the UK. |
Direct Line owns the Churchill and Green Flag brands, as well as its namesake brand as part of a portfolio offering car, pet, home and other insurance policies. | Direct Line owns the Churchill and Green Flag brands, as well as its namesake brand as part of a portfolio offering car, pet, home and other insurance policies. |
In December, experts at JP Morgan said they did not expect any competition concerns from regulators. | In December, experts at JP Morgan said they did not expect any competition concerns from regulators. |
But the CMA said the creation of a single firm "may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services". | But the CMA said the creation of a single firm "may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services". |
The BBC has contacted Aviva for comment. | The BBC has contacted Aviva for comment. |
Any interested parties have been asked to provide feedback to the CMA by 29 May. | Any interested parties have been asked to provide feedback to the CMA by 29 May. |
This means individuals or companies who have a vested interest in the outcome of the deal as they may be impacted can have their say. | This means individuals or companies who have a vested interest in the outcome of the deal as they may be impacted can have their say. |
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