Some thoughts on the Direct Line acquisition deal proposed by Aviva; the main obstacle might well be regulatory issues as regards UK market competition.
COMMENT FROM ALTUS;
Stephen Whitfield, principal consultant at Altus Consulting, comments on the Direct Line and Aviva deal:
“Now that Aviva have made their approach formal it will be interesting to see whether the CMA step in. There is precedent in other marketplaces i.e. when they stopped the Sainsbury-Asda deal due to fears around raised prices for consumers and longer checkout queues.
“That said the personal lines marketplace is not the same as supermarkets and it is clear that there are tremendous synergies available as part of the deal, which in turn could actually result in more competitive pricing.
“What is certain is that assuming the deal gets the relevant approvals, there will be significant work ahead to integrate the two businesses and it will be interesting to see what the longer-term plans are for the DLG brand – will the red phone disappear into the annals of history?”
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