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Ruling set to spark mega-mergers

The floodgates could be opened to more consolidation in financial services following a ruling that the EU Comm-ission was wrong to block the merger between Airtours and First Choice.

Last week&#39s decision by the Court of First Instance comes as a slap in the face for EU internal markets commissioner Mario Monti and could pave the way for mega-mergers among UK financial services firms.

The merger of the two UK holiday firms would have given them a market share of 34 per cent.

A proposed merger of Abbey National and LloydsTSB was blocked under UK merger rules last year but lawyers say the European decision is likely to affect the climate of rulings in the UK.

The EU is set to move away from its current definition of collective dominance or “oligopoly” to a looser US-style arrangement.

Osborne Clarke banking partner Patrick Cook says: “Ultimately, the court&#39s decision means the chances of mergers have been enhanced. The EU is changing its merger policy anyway to move away from the principle of collective dominance to one of a substantial lessening of competition.”

Syndaxi principal Robert Reid says: “We are undoubtedly going to see more mergers, particularly with the life companies.

“There could be less choice which could lead to less competitiveness but I think competition is going to come from IFAs with wrapped products rather than from the product providers.”


NU in talks with Revenue over money back annuity

Norwich Union is in talks with the Inland Revenue to get approval for a money back annuity that will pay out capital after death in the form of income. NU will guarantee the full original value of the annuity pot and will pay the outstanding balance to the annuitant&#39s estate on death as taxable income. […]

Express went off the tracks with buy-to-let mortgage application

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DB plans labelled elitist by pension minister

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Accountants&#39 clients want IFA services, says portal

IFAs could boost their turnover by filling in gaps left by accountants, according to research from small business advice portal Clearlybusiness.The research shows that of the three-quarters of small businesses that use accountants, 88 per cent use them for their annual accounts and 72 per cent for help with income and corporation tax returns. But […]


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