ASSICURAZIONI GENERALI/TORO ASSICURAZIONI
PRESS RELEASE
PRESS RELEASE
ANTITRUST OPENS INQUIRY INTO MERGER OF GENERALI AND TORO INSURANCE COMPANIES
The Italian Competition Authority, at its meeting on 21 September 2006, decided to open an investigation into the Generali-Toro merger. In the Authority's view, this merger, which will create the largest general insurance operator in Italy, could potentially result in significantly reduced competition in various general insurance segments, given the level of overlap in the companies' market shares. Specifically in the Accident, Health, Fire, Other Property and General Third Party branches, as well as in Railway Rolling Stock, Aircraft, Marine Craft, Transported Goods and Aircraft Third Party, the two groups' combined share would exceed 25%.
The legal and economic context in which the merger is taking place, with its elements of rigidity, also reduces the leeway for demand to respond to an increase in market strength on the supply side.
The Authority's analysis will also take into account the possible effects on competition in the relevant areas of the significant personal and financial links between Generali and Fondiaria-Sai. Indeed, in the Authority's view, it cannot be excluded that the merger under review may lead to the creation or strengthening of a position of joint dominance in general insurance by the top two companies whose shares in the new setup would be very large: the high level of concentration in the various market segments involved could tend to alter the correct application of competitive dynamics. Thanks to frequent contacts as well in markets other than insurance, Fondiaria-Sai, the main competitor of the new Generali-Toro entity, may find itself operating in an economic environment where the incentives for genuine competition have been weakened.
Rome, 22 September 2006