In an update on its website, the Commerce Commission rescheduled the due date for its decision from July 02 to August 20. This is the second time the decision has been postponed. It was initially due on February 26, before being moved to May 25 and then July 02.
Valued at US$30 billion, the merger of two of the three largest insurance brokerages in the world has run into numerous regulatory roadblocks, due to competition concerns.
In New Zealand, the Commerce Commission asked the parties about the possible effects of the transaction on the New Zealand market. Some of the concerns include unilateral effects, where the merged entity may be able to unilaterally raise prices to the detriment of the customers, and coordinated effects, where, due to the reduced number of big players in the broking market, firms can coordinate anti-competitive behaviour more easily.
In other jurisdictions, the merger is facing similar hurdles. The European Commission was supposed to release its decision on July 27, but it later revealed that it postponed its decision by a few days to August 03. The US Department of Justice has also filed an antitrust suit in a bid to block the deal, which it says could leave American customers with “fewer choices, higher prices, and lower quality services.”