The Australian Competition Tribunal, the review body for authorisation decisions made by the Australian Competition and Consumer Commission (ACCC), has granted authorisation for ANZ’s proposed acquisition of Suncorp’s banking business, setting aside the ACCC’s decision to deny authorisation.
The ACCC was concerned that the proposed acquisition would further entrench an oligopoly market structure dominated by the four major banks. However, based on its review and some limited new information, the tribunal was satisfied that the transaction would not result in a substantial lessening of competition in any relevant market.
The tribunal found that many of the public benefits claimed by ANZ and Suncorp were either not public benefits or not specific to the proposed acquisition, but any detriments were uncertain and unlikely to outweigh the integration benefits.
Suncorp Group Chairman Christine McLoughlin said the organisation would continue to work with the Queensland Government and federal Treasury to secure the remaining approvals, adding that following completion of the acquisition, the board remained committed to returning capital in excess to the needs of the business to shareholders.
Suncorp Group CEO Steve Johnston said the sale of the bank would result in the organisation becoming a dedicated trans-Tasman insurance company at a time when the need for continued investment in the private insurance sector had never been greater.
“Our ability to meet the rapidly evolving needs of insurance customers and address increasingly complex challenges, such as climate change and affordability, will be significantly strengthened through dedicated investment as a ‘pureplay’ insurance company,” said Johnston.
ANZ CEO Shayne Elliott said the development was a significant milestone and an important step forward in the process. “However, we still have further conditions to meet. We remain committed to completing the acquisition as soon as possible once all sale conditions are met.
“Suncorp Bank is a high-quality business with a strong team and excellent customer base, and we look forward to bringing them access to the best of ANZ, including our platforms and technology. We strongly believe that the acquisition presents significant opportunities for ANZ, Suncorp Bank and our customers, as well as major public benefits including for Queensland,” said Elliott.
ACCC Chair Gina Cass-Gottlieb said that the commission “notes the decision and will reflect on it. The Tribunal’s decision demonstrates the checks and balances of an administrative merger approval process.”
“The tribunal made findings on fundamental matters that informed our concerns, including that the national market for home loans is currently conducive to coordination and that material barriers to entry and expansion remain. However, the tribunal didn’t consider that the proposed acquisition would meaningfully impact on the likelihood of coordination,” said Cass-Gottlieb.
ANZ said it agreed to purchase Suncorp Bank in July 2022, in a move to accelerate the growth of ANZ’s retail and commercial businesses while offering better outcomes for Suncorp Bank customers.
Completion of the acquisition remains subject to legislative amendments by the Queensland Parliament and approval by the Federal Treasurer.