ANZ’s Proposed Suncorp Acquisition Denied by ACCC

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Original media release from ACCC (4/08/2023).

The Australian Competition and Consumer Commission (ACCC) has decided not to grant merger authorisation for ANZ Banking Group (ASX:ANZ) to acquire Suncorp Group’s (ASX:SUN) 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.

“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.”  

“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,” Mr Keogh said.

“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.”

The ACCC today released its determination and an executive summary of its reasons. The full reasons will be released Monday following confidentiality checks with relevant parties.

ANZ can appeal the decision and have on and until the 25th August 2023 to do so.

For more information about the proposed acquisition and the ACCC’s reasons for denial you can find the full ACCC media release by clicking here. As above, you can also find the ACCC’s determination and executive summary by clicking here.