Insurance Australia Group's (ASX:IAG) acquisition of the Royal Automobile Club of Queensland (RACQ) was recently approved by the Australian Competition Regulator, but its other deal with RAC in Western Australia "involves greater risk" of being stopped, said Citi, according to The Australian in a Tuesday report.

The Australian Competition and Consumer Commission (ACCC) said it would not oppose Insurance Australia Group's (ASX: IAG) proposed acquisition of the Royal Automobile Club of Queensland (RACQ), according to a Thursday statement by the regulator.

The regulator found the proposed acquisition is unlikely to substantially lessen competition, as IAG lacks the market power to influence prices or supply terms. post-acquisition.

Citi said it is still optimistic about the upcoming transaction, but it saw "warning signs" in the judgment, the report added.

Citi has a buy rating on IAG with a price target of AU$10.

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