Australian antitrust body approves ANZ deal but others may not be so lucky

Sydney — The Australian Competition Tribunal’s green light for ANZ’s proposed A$4.2bn ($3.2bn) buyout of Suncorp’s banking assets on Tuesday does not mean similar deals will be waved through, the head of the antitrust regulator said.

The ruling delivered by the ACT in Sydney meant ANZ could proceed with the deal despite the Australian Competition and Consumer Commission (ACCC) rejecting the bid on competition grounds in 2023.

In a telephonic interview, ACCC chair Gina Cass-Gottlieb said that despite losing the ANZ and Suncorp case, the regulator would apply “careful consideration on the parties contemplating an acquisition” in future.

“This is not a green light to future banking transactions. This shows there are serious questions that need to be assessed on any future transactions,” she said.

In his verdict, ACT deputy president justice John Halley said the Australian banking sector was “conducive to co-ordination” as the four major banks, including ANZ, controlled 72% of the home lending market.

However, he added that the tribunal thought a merged ANZ and Suncorp bank would “not have a meaningful impact on the degree of likelihood of the major banks engaging in successful co-ordination”.

The ACCC said in 2023 that allowing the deal to go ahead would “further entrench an oligopoly market structure” in which four lenders dominate the A$2-trillion home loans market.

The full reasons for the ACT’s decision have been given to the parties involved but are yet to be made public.

“From its summary, the tribunal seems to have focused on certainty, weighing the potential risk of a reduction in competition that it considered too uncertain and insignificant against the more certain benefits from integration and productive efficiency forecast to arise,” said Kirsten Webb, a partner at Clayton Utz.

Treasurer Jim Chalmers launched a two-year competition review in August that will consider a request from the ACCC to strengthen its powers and make it mandatory for companies or deals above a certain size to seek the regulator’s approval.

Under the existing rules, it is voluntary to apply for ACCC approval in a merger. The ACCC can take deals which do not apply for a competition review to court.

Cass-Gottlieb said she believed the outcome of the case showed the ACCC should have greater powers to investigate any potential anticompetitive behaviour in deals. 

Reuters