The deal will be probed by the Competition and Markets Authority (CMA), and a decision will be made by 10 July on whether the £3.7bn takeover will move to a Phase II enquiry. The current probe will look at whether there is a “realistic prospect” of a substantial lessening of competition in the market. A Phase II enquiry would involve a more in-depth assessment.
Car insurance leader
The takeover of Direct Line by Aviva would result in one insurer holding more than a fifth of the home and motor insurance markets in the UK. When the deal was announced in December 2024, experts said they did not expect it to be referred to the CMA.
The deal would give the combined company, which would own the Green Flag and Churchill brands as well as Direct Line and Aviva, a size rivalling those of market leaders such as Prudential and Legal & General, in terms of stock market value.
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CMA powers expected to be lessened
The move comes despite recent government plans to lessen the power of the CMA by directing it to be more “pro business” and saying it would consult on a “new growth-focused strategic steer to the CMA”.
The former chair of the organisation, Marcus Bokkerink, resigned in January and was replaced by interim chair and former Amazon boss Doug Gurr.
Aviva shares, which are up nearly 12% in a week, fell 0.31% in early trading on the news.
This article was first published on Mortgage Solutions‘ sister site, YourMoney.com. Read: Government announces Aviva takeover probe
