CMA Investigates Aviva’s £3.6B Acquisition of Direct Line Group

The regulator’s review will focus on whether the merger could result in a “substantial lessening of competition” in the sectors where both companies operate. Aviva, the largest insurer in the UK, announced the deal in December to acquire Direct Line, whose portfolio includes well-known brands such as Churchill and Green Flag. The acquisition is seen as a strategic move to bolster Aviva’s presence in key insurance categories, including home, travel, and motor insurance.

The CMA has begun a 40-working-day Phase 1 investigation of the Aviva acquisition, with a deadline set for 10 July. By then, the regulator will decide whether to clear the deal or escalate it to a more detailed Phase 2 inquiry, per Reuters. The probe marks one of the early challenges for the CMA under its renewed commitment to faster, more efficient regulatory scrutiny.

This investigation also serves as a litmus test for the CMA’s newly adopted approach following criticism over sluggish decision-making. In February, Business Secretary Jonathan Reynolds called for a “regulation reset,” urging watchdogs to adopt a more pragmatic stance in their evaluations and to better reflect the realities of how markets function.

The CMA responded with a promise to bring greater “pace, predictability, proportionality and process” to its merger reviews. The agency’s chief executive, Sarah Cardell, affirmed that efforts are underway to transform how mergers are handled, as outlined in a newly published Mergers Charter.

Aviva, led by chief executive Amanda Blanc, is a major player in the UK financial services landscape, offering a broad suite of insurance, wealth, and retirement products to more than 20 million customers. Direct Line, meanwhile, has been under the leadership of Adam Winslow, who joined from Aviva last year after heading its UK and Ireland general insurance unit.

Source: Reuters