Norwich Union and
CGU Merger
Another so-called mega-merger of the monopolies has
occurred, in this case within the banking and financial services sector. The
CGU (Commercial General Union) and Norwich Union Insurance firms have agreed a
merger reportedly worth £19 billion – subject to Monopolies and
Mergers Commission approval. Norwich Union is the country’s fourth largest
general insurer, whilst CGU itself was born out of a previous merger between
Commercial Union and General Accident in 1998. To be called CGNU, the new
company – which will be the fifth largest in Europe – aims to compete
with European counterparts AXA and Allianz, of France and Germany respectively.
CGNU expects up to 4,000 of its almost 35,000 British based
workforce to lose their jobs, and a further 1,000 jobs will go worldwide.
Reacting to the news Roger Lyons, General Secretary of the MSF union, said that
"compulsion is completely unacceptable and will be resisted in every way
possible".
Apparently the merged company CGNU will achieve £250
million savings within 18 months. CGU Chief Executive Bob Scott justified the
merger on grounds of the "massive changes in financial services
world-wide". He stressed, "The merger of CGU and Norwich Union will
create the UK’s largest insurance group with strong positions in a number
of European and international markets." This logic is also seen in recent
mergers within this sector which created CGU, Royal Insurance and Sun Alliance,
Lloyds TSB’s acquisition of insurance firm Scottish Widows and most
recently the Royal Bank of Scotland securing control of NatWest.
The merger has the stated aim of competing in the
globalised market. Such mergers and takeovers have been escalating as the
competition becomes more intense and the anti-social offensive intensifies. The
"economies of scale" such "mega-mergers" brings are driving
the process of monopolisation, while in the insurance sector alone tens of
thousands of workers have lost their jobs in the past five years in this
scramble. The concentration, monopolisation and decrease in number of the banks
and financial institutions has particularly been a phenomenon of the 20th
century. With the present stage of capitalism, these institutions not only call
the tune for the whole economy by their control of finance capital, but are the
chief beneficiaries of the payment of interest on government debt. Furthermore,
a large proportion of society is in hock to the insurance companies, and the
rich find their hands on the wealth that the workers produce in this way also.
Especially the further monopolisation of the banks, which analysts predict has
not yet ended, represents the further placing every pore of society in a
position where the rich can demand that it enriches them on a massive and
continual basis.
