Probe launched into Aviva’s £3.7bn takeover of Direct Line | EUROtoday

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Aviva’s deliberate takeover of Direct Line is to be reviewed by the UK’s competitors watchdog, probably setting again a £3.7bn deal.

The two insurance coverage corporations agreed a significant deal in December final 12 months, however the Competition Markets Authority (CMA) stated it was investigating whether or not a merger would end in a “substantial lessening” of competitors within the insurance coverage sector.

The mixed corporations would make turn into a major power within the automotive insurance coverage sector, which has caught the eye of the CMA.

The watchdog will report its findings of the probe in July.

If the Aviva and Direct Line deal goes forward, its dimension would rival different insurers like Legal & General and Prudential when it comes to market worth.

Aviva shareholders would personal about 87.5% of the brand new firm whereas Direct Line shareholders would personal about 12.5%.

The mixed firm would end in an insurer with greater than 20% of the share of dwelling and motor insurance coverage within the UK.

Direct Line owns the Churchill and Green Flag manufacturers, in addition to its namesake model as a part of a portfolio providing automotive, pet, dwelling and different insurance coverage insurance policies.

In December, consultants at JP Morgan stated they didn’t anticipate any competitors issues from regulators.

But the CMA stated the creation of a single agency “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 remark.

Any events have been requested to offer suggestions to the CMA by 29 May.

This means people or corporations who’ve a vested curiosity within the end result of the deal as they might be impacted can have their say.

https://www.bbc.com/news/articles/ce81xr7dpvlo