The ACCC has decided not to grant merger authorisation for ANZ Banking Group to acquire Suncorp Group’s banking arm.
Under the statutory test, the ACCC must not grant authorisation unless it is satisfied in all the circumstances that the proposed acquisition would not be likely to substantially lessen competition, or that the likely public benefits would outweigh the likely public detriments.
“We are not satisfied that the acquisition is not likely to substantially lessen competition in the supply of home loans nationally, small to medium enterprise banking in Queensland, and agribusiness banking in Queensland,” ACCC Deputy Chair Mick Keogh said.
“Second-tier banks such as Suncorp Bank are important competitors against the major banks, especially because barriers to new entry at scale into banking are very high. Evidence we obtained strongly indicates that the major banks consider the second-tier banks to be a competitive threat,” Keogh said.
“We are not satisfied that the acquisition is not likely to substantially lessen competition in the supply of home loans to Australian consumers,” Keogh said.
Suncorp Group Chairman Christine McLoughlin said Suncorp was surprised and disappointed with the determination and would fully support ANZ through the next step in the merger authorisation process, being a referral of the ACCC’s decision to the Australian Competition Tribunal.
“When we embarked on this transaction, we were of the firm belief it was in the best interests of our customers, shareholders and employees and that it would provide a net benefit to the Australian economy,” Ms McLoughlin said.
"Together with external economic and industry experts, we determined that this deal would not adversely impact the competitive dynamics in the markets in which we operate,” she said.
“There is nothing we’ve seen throughout the ACCC process that has caused us to change our view on these matters and we believe the Tribunal will accept the merits of our case.
“In fact, the 12 months that have passed since the transaction was announced have only reinforced the rationale for the sale, and the importance of the benefits it will deliver for our stakeholders, the state of Queensland and the broader public.
“Together with ANZ, we will make our case to the Tribunal, which is led by a justice of the Federal Court of Australia. The Tribunal will look at all of the evidence with fresh eyes before forming its own view.”