The UK Competition Markets Authority (CMA) has started a probe to scrutinise Aviva‘s recent proposal to acquire AIG Life UK.
This is aimed at evaluating whether the move could potentially diminish competition within the UK insurance services sector.
Announced in September 2023, the deal involves Aviva purchasing AIG Life UK from Corebridge Financial, a subsidiary of American International Group (AIG), for £460m ($562.83m).
In a statement, the competition regulator said: “The CMA is considering whether it is or may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the UK for goods or services.”
The watchdog has opened the floor for comments from interested parties to aid its assessment, with a submission deadline set for 22 February 2024.
AIG Life UK specialises in a range of individual and group protection products, serving around 1.3 million individual protection clients and 1.4 million group protection members.
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This acquisition aligns with Aviva’s strategy to grow its capital-light businesses, accelerate its presence in the UK protection market and diversify distribution methods.
Announcing the deal, Aviva group CEO Amanda Blanc said: “This acquisition brings significant strategic and financial benefits to Aviva.
“It strengthens our prospects in the highly attractive UK protection market and continues our progress in repositioning the group towards capital-light growth.”
The combined protection business is expected to benefit from AIG Life UK’s established relationships with local and corporate independent financial advisors and other partners.
Last month, Aviva finalised a £140m bulk purchase annuity full scheme buy-in transaction with the Trustee of the Guilbert UK Retirement Benefits Plan, sponsored by Office Depot UK Pension Sponsor.
In the same month, Aviva also closed a £100m deal to buy Optiom, a Canadian vehicle replacement insurance provider.