Insurance Australia Group's Proposed Acquisition of RAC Insurance Headed for Phase 2 Review
Insurance Australia Group's (ASX:IAG) proposed acquisition of RAC Insurance has the potential to substantially reduce competition and therefore necessitates an in-depth phase 2 review, the Australian Competition and Consumer Commission (ACCC) said Friday.The proposed deal would merge two of the largest insurers in Western Australia, the regulator said, adding that it is also considering what impact the deal might have on smash repair services."We consider the acquisition could substantially lessen competition in both the supply of motor vehicle insurance and the supply of home and contents insurance in Western Australia," ACCC Chair Gina Cass-Gottlieb said.Insurance Australia Group acknowledged the ACCC's decision to proceed with a phase 2 review, saying that the company remains confident in its position and will continue to work with the competition commission throughout the process.The phase 2 investigation is expected to take up to 90 business days, Insurance Australia Group added.