UK watchdog launches investigation into Aviva’s £3.7bn takeover of Direct Line

The contention watchdog has launched an probe into Aviva’s multibillion-pound takeover of the rival insurer Direct Line.

The £3.7bn deal, which was agreed past year, volition harvester the security operations of some companies, successful a determination that is expected to make 1 of the biggest car insurers successful the country.

The Competition and Markets Authority started its signifier 1 probe into the takeover connected Wednesday, a procedural measurement that gives it up to 40 moving days to measure the deal’s imaginable interaction connected contention successful the sector.

The deadline is acceptable for 10 July, astatine which constituent the regulator volition either springiness the merger the greenish airy oregon proceed to a much in-depth signifier 2 investigation.

Aviva, the UK’s biggest insurer, agreed to bargain the rival Direct Line for £3.7bn past year. Aviva’s main executive, Amanda Blanc, has expanded its concern successful the UK, Ireland and Canada, portion selling disconnected subsidiaries abroad.

Both companies are among the biggest insurers successful the UK. Direct Line, which owns brands specified arsenic Churchill and Green Flag, besides offers home, travel, favored and beingness insurance. Aviva sells a scope of insurance, wealthiness and status products and has much than 20 cardinal customers.

Adam Winslow, who became the main enforcement of Direct Line conscionable implicit a twelvemonth ago, joined from Aviva wherever helium was caput of its UK and Ireland wide security division.

Aviva and Direct Line told investors past twelvemonth they planned to chopped 5-7% of the combined group’s worker base implicit 3 years, equivalent to betwixt 1,600 and 2,300 jobs retired of astir 33,100. The companies said astatine the clip that the eventual fig of affected roles could beryllium little due to the fact that of unfilled vacancies and yearly turnover of staff.

Prior to the deal, Direct Line had besides been undergoing its ain turnaround efforts. In November the institution said it would axe astir 550 jobs successful an effort to chopped costs. The insurer said “core brands” specified arsenic Churchill would beryllium maintained successful the merged group.

The takeover is the latest large blockbuster woody for Aviva, which bought the rival Friends for Life for £5.6bn successful 2014.