SYDNEY: ANZ Group’s A$4.9bil (US$3.2bil) buyout of Suncorp’s banking business is cleared by the Australian Competition Tribunal (ACT), meaning the bank can press on with the takeover of its significant rival.
The ruling came in response to an appeal by ANZ and Suncorp of a decision by the Australian Competition and Consumer Commission (ACCC) that blocked the deal in August on the grounds it would worsen competition in Australia’s banking sector.
Yesterday, the ACT’s deputy president, Justice John Halley, told the Federal Court in Sydney that there were sufficient “net public benefits” to allow the deal to go ahead.
He said the proposed deal was unlikely to substantially lessen competition in Australia’s home lending market.
ANZ shares fell 1.8% in early trade, while Suncorp stock rose 6%. The S&P/ASX200 was down 0.32%.
The takeover still requires approval by Australian Treasurer Jim Chalmers and an official sign-off from the government of Queensland, where Suncorp is based.
If the deal goes ahead, Melbourne-based ANZ, which has trailed its larger rivals in home lending, will be able to grow its loan book at a time when banks are struggling to attract new borrowers after a string of interest rate rises.
“This is a significant milestone and an important step forward in the process, however, we still have further conditions to meet,” ANZ chief executive Shayne Elliott said in a statement.
“We remain committed to completing the acquisition as soon as possible once all sale conditions are met.”
Chalmers said in a statement that he would “carefully and methodically consider whether the proposed acquisition is in the national interest” once the bank sought approval.
Suncorp chief executive Steve Johnston said the decision would allow the diversified financial firm to become a “dedicated Trans-Tasman insurance company” as it pared back its business model.
Selling the bank would reduce capital requirements for Suncorp, and chairperson Christine McLoughlin said any remaining excess capital would be returned to shareholders.
The tribunal’s ruling is the first major loss for ACCC chairperson Gina Cass-Gottlieb since she became the competition regulator almost two years ago.
The ACT last year backed the ACCC when it turned down an appeal from Telstra and TPG on a A$1.8bil network-sharing deal.
“Banking markets are critical for many homeowners, businesses and farmers. The ACCC will continue to apply scrutiny to these markets across the breadth of our functions, including merger assessments and enforcement investigations,” Cass-Gottlieb said in a statement yesterday.
The ACCC said last year that allowing the deal to go ahead would “further entrench an oligopoly market structure” in which four lenders, including ANZ, have three quarters of the country’s A$2 trillion in home loans.
ANZ, Australia’s fourth largest bank by market capitalisation, said when it first announced the Suncorp transaction in 2022 that buying the banking assets would boost its mortgage book by A$47bil to A$307bil.
Despite the positive ruling, analysts are questioning whether ANZ buying Suncorp’s bank will mean it dramatically increases its home lending market share. — Reuters
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