In its preliminary findings on the proposed acquisition, the regulator is "not convinced" about the benefits of the deal
The Australian Competition and Consumer Commission appears to be taking a dim view of ANZ’s proposed $4.9 billion takeover of Suncorp’s banking business.
The ACCC said in a Tuesday statement that it was not convinced about the benefits ANZ says will accrue from the merger, and will be demanding more information.
“The ACCC’s preliminary view is that the information currently before it is insufficient to substantiate the nature, likelihood and extent of the claimed public benefits, including ANZ’s estimates of future synergies that will be achieved and claims regarding public commitments to investment in Queensland or improvements in prudential stability arising from the Proposed Acquisition,” the regulator said in the statement.
The ACCC’s approval is required for the deal to go through, The Australian reported. However, despite ANZ’s insistence that its purchase of Suncorp’s bank would not “materially alter” market share, the regulator echoed the concerns of many market-watchers that the deal would hurt competition in the banking sector.
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ACCC deputy chair Mick Keogh (pictured above left) told The Australian that the regulator was doubtful of the benefits ANZ and Suncorp claimed would accrue from the deal.
“Not convinced” of the benefits
“We’ve had it put to us there will be a number of public benefits by the parties,” Keogh said. “We’re not convinced of that. We’re still undertaking a fairly detailed view of the available data we have obtained.”
Keogh said that the ACCC has observed “that there is not strong competition between the four major banks.”
“Some of the second-tier regional banks do exert competition and have had an impact on the behaviour of the major banks,” he told The Australian. “We’re talking about a situation where a significant second-tier bank will be taken out.”
ANZ “welcomes” further consultation
ANZ CEO Shayne Elliott (pictured above right) said the bank would respond to the regulator’s concerns.
“We welcome the detailed work the ACCC is undertaking following ANZ’s application, and we will examine their preliminary views and respond to the matters raised,” Elliott said in a statement. “When we announced the acquisition, we acknowledged that there would be questions from government and regulators about the competition aspects of this transaction, and we welcomed that scrutiny. We welcome the further community consultation that will now occur.”
In the same statement, ANZ reiterated its claim that the proposed acquisition “is not likely to substantially lessen competition, and that the public benefits of the acquisition will outweigh any public detriments.”
Other financial institutions and market experts have expressed misgivings about the proposed merger. Bendigo and Adelaide Bank recently said in a submission to the ACCC that it, not ANZ, should be the one to acquire Suncorp’s bank.
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