Rival clears ACCC hurdle in takeover bid for iSelect
Rival clears ACCC hurdle in takeover bid for iSelect
5 December 2022
The competition watchdog has approved Innovation Holdings Australia’s (IHA) proposed takeover of rival comparator iSelect, after its examination of the bid concluded the deal was “unlikely” to lead to reduced competition in the sector.
As part of its review, the Australian Competition and Consumer Commission (ACCC) heard concerns from some market participants that iSelect and Compare The Market – owned by IHA Group – closely compete.
But ACCC says only a small minority of consumers buy insurance, energy, and financial products through the two comparators and even after the acquisition, they would continue to face significant competition from other rivals and retailers using alternative means to attract consumers.
“The online comparison services industry is very dynamic and so the threat of new entry or expansion by a competitor is likely to constrain the merged firm,” ACCC Commissioner Liza Carver said.
“Consumers can readily purchase insurance, financial and energy products directly from the supplier, and shop around using multiple competing comparator sites including government comparison websites.”
ACCC says comparator websites generally provide services with no direct cost to consumers, while charging commissions or fees to retailers for placement in search results or for when a consumer completes a sale via referral from the comparator.
IHA already has a 26% stake in the business and is part of IHA Group, which owns Compare The Market and insurance provider Auto & General – which primarily operates under the brand Budget Direct.
IHA and iSelect have already entered into a Scheme Implementation Agreement for the former to acquire all the outstanding shares it does not currently own, which was subject to approval from the competition watchdog.
