ACCC rejects ANZ, Suncorp merger


The Australian Consumer and Competition Commission (ACCC) has rejected ANZ's $4.9 billion bid to acquire Suncorp Group's banking arm, citing concerns around competition and potential consumer detriment.

The regulatory body says it remains unsatisfied with the proposal as the public benefits would not be likely to outweigh 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," says ACCC deputy chair Mick Keogh.

accc rejects anz suncorp merger

"These banking markets are critical for many homeowners and for Queensland businesses and farmers in particular. Competition being lessened in these markets will lead to customers getting a worse deal."

Keough reinforced the need for second-tier banks such as Suncorp Bank.

Such institutions are important competitors against the major banks, he says, ".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.

"The proposed acquisition of Suncorp Bank by ANZ would further entrench an oligopoly market structure that is concentrated, with the four major banks dominating. It also limits the options for second-tier banks to combine and strengthen in a way that would create a greater competitive threat to the major banks."

ANZ chief executive Shayne Elliott acknowledged the decision by the ACCC, saying the banking giant is dissatisfied.

"We are naturally disappointed and disagree with the ACCC's decision. We are closely reviewing the determination and will seek an independent decision through the avenues of review available to us," he says.

"We believe the acquisition will improve competition, which will benefit Australian consumers, particularly in Queensland. All of the relevant markets are intensely competitive and will continue to be intensely competitive after the acquisition."

Elliott added the acquisition would create a combined bank better equipped to respond to competitive pressures and "deliver significant public benefits, particularly in Queensland".

Last year, ANZ agreed to purchase Suncorp's banking arm, calling it a vote of confidence in Queensland's future.

Following the proposal, the ACCC raised concerns and launched a review of the acquisition that involved extensive consultation with market participants, interested parties and regulators.

Today, the ACCC issued its determination along with an executive summary outlining its reasons for rejecting the proposal.

The comprehensive reasons are scheduled for release on Monday, pending confidentiality checks with the concerned parties.

According to Australian competition law, if the ACCC decides not to grant authorisation, the decision can be reviewed by the independent Australian Competition Tribunal.

Furthermore, ANZ explained the acquisition is still contingent upon meeting additional conditions, including approval from the Federal Treasurer and potential amendments to Queensland legislation.

"While the acquisition remains subject to these conditions, ANZ continues its preparations for the integration of Suncorp Bank into ANZ," the bank said.

This article first appeared on Financial Standard

Get stories like this in our newsletters.

Related Stories

Cassandra Baldini was a senior journalist at Financial Standard from June 2022 to December 2023. Prior to this, she was a reporter at the Daily Telegraph's digital subsidiary News Local covering court, crime and community news. She held various roles at Bloomberg in the London newsroom, and worked at Vanguard and Sony. She has a Bachelor's degree in Journalism from Macleay.