The chairman of Mercer Ireland has said his company could be merged with Irish Pensions Trust (IPT) without necessarily coming into conflict with competition law.

IPT is the main company involved in the group pensions business in the Republic, with Mercer in second place. The two operations could be merged if the agreed £1.45 billion takeover by US-based Marsh & McLennan of British-based Sedgwick, goes ahead as proposed. IPT is owned by Sedgwick and Mercer by Marsh & McLennan.

Mr Jim Kelly, chairman of Mercer in Ireland, said it was "not necessarily the case" that one of the two group pensions companies would have to be sold. "It could end up like that but it is not necessarily the case."

One of the issues, he said, was how you define the market being served by the companies. His company, he added, now offered a wide range of services such as investment consultancy.

However, he believed the position of the two companies in the Irish market would probably mean a submission would have to be made to the Competition Authority.

As part of the worldwide takeover, Marsh & McLennan will make a submission to the European Commission seeking its approval.

Mr Kelly said he did not take the view that the merger of Mercer and IPT would lead to job losses. A combined operation would have just under 300 employees.

"The issue is not rationalisation. It is about developing the range of services that our clients are asking us for." The merger would accelerate the process of developing new specialised services. A spokesperson for IPT was not available.