The consumer watchdog is investigating plans by leading mortgage finance insurer PMI to buy CGU’s Australian and New Zealand Lenders’ Mortgage Insurance (LMI) for $107 million.

The purchase will cut the field to three, and opposition to the deal is believed to be coming from inside the sector.  The ACCC will examine whether the purchase by US-owned PMI – a leader in risk management technology and mortgage insurance – will affect the market.

CGU Managing Director Ian Balfe said CGU is “committed to pursuing a strategy of depth, not width, in the Australian market. It therefore makes sense for us and our customers to sell the business to a proven and well capitalised specialist like PMI,” he said. 

CGULMI GM Richard Nott will remain leader of the business until the completion of the acquisition. The two operations will combine at the end of the first quarter 2002.