Both insurers were already partially owned by Intesa Sanpaolo through UBI Banca S.p.A. (UBI), which held 20% of Aviva and 40% of Lombarda. Previously, both acquisitions were cleared by IVASS - the Italian Insurance Authority. In both cases, the favorable opinion of the Competition Authority was needed.
As in the Italian insurance sector there are strong competitors, such as Generali, Unipol, Gruppo Assicurativo Poste Vita and Allianz, none of the two transactions raised significant competition concerns. Overall, according to ICA's analysis, the aggregated market share of the buyer and the two acquired companies doesn't exceed 25 - 30% on each life insurance line of business.
According to the ICA's published decision, "with reference to the insurance markets, due to the consolidated orientation of the Authority, each branch of the life and non-life insurance sectors represents a distinct market. This distinction with respect to individual insurance branches is based, mainly, on the object of the service rendered, on the risks assumed and on the insurance coverage objective expressed by the demand for each individual branch. In addition, the individual non-life and life insurance markets are distinguished between the production phase, having a national geographical dimension, and the distribution phase, which is characterized by its local dimension, in a provincial first approximation, as per the Authority's consolidated practice."
After finalizing the acquisition operations, Intesa Sanpaolo will have full control over the two insurance companies, thus increasing its role as a distributor of insurance products.
Recently, ICA adjusted the relevant turnover thresholds for merger filing purposes to reflect the variations of the index of the GDP price deflator. Following this adjustment, a filing obligation in Italy is triggered if the following cumulative thresholds are met:
(i) the aggregate turnover of all participating undertakings exceeds EUR 511 million (whereas the previous threshold was EUR 504 million);
(ii) the turnover of each of at least two of the participating undertakings exceeds Euro 31 million.