Competition watchdog has Bennetts sale under microscope
UK motorcycle insurance specialist Bennetts was sold for £26m, although now the CMA is investigating the deal
THE competition watchdog (CMA) is to investigate the sale of Bennetts to The Atlanta Holdings C (a subsidiary of the Ardonagh Group) which took place in February this year.
The acquisition is reported to have cost Atlanta Investment Holdings C £26m and will see Bennetts joining the same portfolio as Carole Nash. It’s this part of the deal, which will see two of the biggest motorcycle insurers under the same umbrella, that the CMA is interested in.
The deal, which is as yet unfinalised, will now be scrutinised by the competition watchdog under the merger provisions section of the Enterprise Act 2002.
In a statement, the CMA said it “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 United Kingdom for goods or services.”
Speaking at the time of the sale, Atlanta chief executive Ian Donaldson said: “It's [Bennetts'] client-centric focus which makes it a brand we’ve admired for some time and one that’s set to complement our business lines beautifully. We look forward to the collaboration opportunities ahead.”
The CMA’s main concern is that two of the UK’s biggest insurance companies effectively under one roof could create a situation whereby competition in the market is nullified. It’s not clear what the CMA’s action will be, should they find the deal in breach of the Enterprise Act, although one option is that it could forbid the sale.
Simon (AKA Toad) has been working within the motorcycle industry for more than twelve years, and a member of the motorcyclist family since birth. Growing up around British-built single and twins, it was inevitable that a life on two wheels was on the cards, from a very early age!
