Australian watchdog sends IAG-RAC deal to Phase 2 review

The Australian Competition and Consumer Commission (ACCC) has moved Insurance Australia Group’s (IAG) planned acquisition of RAC Insurance (RACI) into a Phase 2 review, saying the transaction could “substantially lessen competition”.

RACI is portion of the Royal Automobile Club of Western Australia (RAC WA).

In May 2025, IAG agreed to bargain the security concern of RAC WA and sealed a 20-year exclusive woody covering the organisation and licensing of RAC-branded security products.

The transaction is priced astatine A$1.35bn ($965.1m), made up of A$400m for the shares successful RACI and a A$950m upfront outgo tied to the organisation arrangement.

Both IAG and RACI supply centrifugal screen arsenic good arsenic location and contents security successful Western Australia (WA).

If completed, the transaction would mean IAG underwrites motor, location and contents policies carrying the RAC brand.

The ACCC is besides examining imaginable effects connected smash repair services.

The regulator said it has not formed a last sentiment and volition proceed its appraisal during Phase 2.

It is seeking submissions connected the Phase 2 Notice by 4 May 2026.

ACCC seat Gina Cass-Gottlieb said: “This acquisition would harvester 2 of the biggest insurers successful WA.

“RACI is WA’s marketplace person some successful centrifugal conveyance security and successful location and contents insurance.

“We see the acquisition could substantially lessen contention successful some the proviso of centrifugal conveyance security and the proviso of location and contents security successful Western Australia,” she added.

IAG archetypal sought ACCC clearance for the transaction successful 2025 nether the erstwhile informal merger system. In December, the regulator declined to wide the woody connected the ground of the accusation earlier it astatine that stage.

After the ceremonial merger authorities began connected 1 January 2026, IAG lodged the transaction again and the ACCC is present reviewing it nether those rules.

The ACCC whitethorn spot a notified transaction into Phase 2 wherever it is satisfied the deal, if carried out, could, successful each the circumstances, person the effect, oregon beryllium apt to person the effect, of substantially lessening contention successful immoderate market.

Under the Competition and Consumer Act, a Phase 2 reappraisal whitethorn tally for up to 90 concern days, unless extended successful definite circumstances.

The projected transaction excludes RAC’s roadside assistance limb and different activities including batteries, finance, location security, status living, tourism, travel, tyres and conveyance servicing and repair.

"Australian watchdog sends IAG-RAC woody to Phase 2 review" was primitively created and published by Life Insurance International, a GlobalData owned brand.