Brussels, 29 April 2014
Mergers: Commission approves acquisition of MetLife Assurance Limited by Rothesay Life Limited
The European Commission has cleared under the EU Merger Regulation the proposed acquisition of the insurance company MetLife Assurance Limited ("MAL") by rival Rothesay Life Limited ("Rothesay"), both of the United Kingdom. The Commission concluded that the transaction would not raise any competition concerns, in particular because the merged entity will continue to face strong competition after the merger.
The Commission examined the effects of the merger on competition in a specialised area of insurance, namely services aimed at reducing the risk exposure of Defined Benefit Pension Schemes. In this area, both parties are active in the market for Bulk Annuity contracts and its sub-segments for Buy-in and Buy-out transactions in the United Kingdom.
Bulk Annuity contracts transfer the responsibility for meeting on-going payments to pensioners from a pension scheme to an insurer, in exchange of a single up-front fixed payment. The day-to-day relationship with pensioners either remains with the pension scheme (Buy-in sub-segment) or is transferred to the insurers (Buy-out sub-segment).
The Commission concluded that the transaction would not raise competition concerns, because the merged entity would continue to face strong competition after the merger and customers would still have sufficient alternative suppliers in the market for Bulk Annuity and its sub-segments in the United Kingdom. The Commission found, in particular, that other strong players, such as Pension Insurance Corporation and Legal & General will continue to compete with the merged entity in these markets.
The transaction was notified to the Commission on 21 March 2014.
Companies and products
Rothesay is an insurance company headquartered in London and jointly controlled by Blackstone Group L.P. and Goldman Sachs Group Inc. It offers de-risking solutions to trustees and employers managing Defined Benefit Pension Schemes in the United Kingdom, namely Bulk Annuity contracts.
MAL is also an insurance company currently owned by the US based company MetLife European Holdings LLC. It offers Bulk Annuity contracts to trustees and corporate pension funds, in the United Kingdom and Ireland.
Merger control rules and procedures
The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the European Economic Area or any substantial part of it.
The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).