IAG and Wesfarmers have hailed the Australian Competition and Commerce Commission’s approval of their upcoming transaction as a “significant milestone”.

Yesterday, the ACCC okayed the sale of Wesfarmers’ underwriting business to IAG, stating it does not “materially change competitive dynamics”.

IAG managing director and CEO, Mr Mike Wilkins, welcomed the ACCC’s approval as a significant milestone on the path to successfully completing the acquisition in Australia and New Zealand. “Bringing together the businesses will provide us with enhanced capabilities to meet the needs of our customers and partners and provide them with a broader product offering,” he said.

Wesfarmers MD Richard Goyder also said he was pleased that a key transaction milestone had been achieved.

“Wesfarmers welcomes the ACCC’s announcement regarding Insurance Australia Group’s acquisition of our Australian underwriting operations. This represents an important step in the sale process which we believe is in the best interests of our shareholders, while offering the customers of our underwriting businesses the opportunity to become part of an established leading insurance organisation”, Goyder said.

The Australian Prudential Regulation Authority (APRA) and the Federal Treasurer are yet to approve the Australian portion of the transaction.

 In New Zealand, the acquisition needs to be approved by the New Zealand Commerce Commission (NZCC) and The Reserve Bank of New Zealand. The Overseas Investment Office issued its consent for the New Zealand portion of the transaction on 6 March 2014, while the NZCC has advised that it will now issue its decision on 30 April 2014.

Wesfarmers expects completion of the transaction, subject to regulatory approval, in the second quarter of the 2014 calendar year.