Australia's Competition Regulator Blocks IAG's RACI Takeover Again
By Stuart Condie
SYDNEY--Australia's competition regulator again blocked Insurance Australia Group's proposed acquisition of a Western Australia state insurance business as part of a deal worth about US$960 million.
The Australian Competition and Consumer Commission on Wednesday said that it opposed IAG's bid for control of The Royal Automobile Club of Western Australia's insurance business.
The ACCC first opposed the acquisition in December but IAG reapplied under new merger regulations, which took effect Jan. 1.
IAG said it would now apply to the ACCC on grounds of the acquisition's public benefit. The ACCC will have 50 business days to decide whether benefits to consumers would outweigh negative effects, which the regulator said would include a substantial lessening of competition.
"If the acquisition were to proceed, we consider the level of constraint from other insurers would be unlikely to be sufficient to address the loss of competition," ACCC Chair Gina Cass-Gottlieb said.
The ACCC said the transaction would give IAG a 55% to 65% share of the state's motor-insurance market, and between 50% and 60% of its ho...