ANZ won’t let sun set on stalled $4.9b bank takeover

Derek Rose and Sam McKeith | August 4, 2023

ANZ will keep pursuing its proposed $4.9 billion take-over of Suncorp’s banking arm despite the competition watchdog rejecting the deal.

The proposal was knocked back by the Australian Competition and Consumer Commission over concerns it would further cement the market dominance of the big four banks.

ANZ plans to appeal the decision to the independent Australian Competition Tribunal, a move Suncorp supports.

“Together with ANZ, we will make our case to the tribunal, which is led by a justice of the Federal Court of Australia,” Suncorp chairwoman Christine McLoughlin said.

“The tribunal will look at all of the evidence with fresh eyes before forming its own view.”

S&P Global Ratings noted the planned joint appeal, saying it still viewed the acquisition as a “plausible outcome”.

The ACCC said the proposed acquisition had the potential to lessen competition in the Queensland market for home loans as well as banking services to small firms and agribusinesses.

“The four majors dominate and have dominated for some considerable time and we considered this transaction was likely to reinforce or almost cement that continuing dominance,” deputy chair Mick Keogh said.

“That therefore meant we would have four majors very similar in many respects and more likely to be engaged in live-and-let-live competition rather than the fierce competition that would benefit consumers.”

But ANZ believes the deal will improve competition and benefit consumers by creating a combined bank more able to respond to competitive pressures.

“All of the relevant markets are intensely competitive and will continue to be intensely competitive after the acquisition,” chief executive Shayne Elliott said.

The head of the independent Bendigo and Adelaide Bank, Marnie Baker, said the decision was a good outcome for competition, customers and the community.

“We note that in making its decision the ACCC said that non-major banks are both an important source of competitive pressure and a competitive threat to major banks,” she said.

Suncorp Group chief executive Steve Johnston said the public would not reap the gains of a significant jobs and investment package the banks negotiated with the Queensland government if the deal did not go ahead.

The package included ANZ creating a major tech hub in Brisbane with 700 workers hired or placed there over five years and Suncorp spending $19 million to develop a disaster response centre at its headquarters in the state capital.

If the tribunal approves the deal, Mr Johnston expects the transaction to be completed by mid-2024.

The tribunal has overturned previous ACCC decisions, including its 2019 attempt to stop a merger between Vodafone Hutchison and TPG Telecom.

But it backed the regulator in June regarding its decision to block a spectrum-sharing arrangement between TPG and Telstra.

Treasurer Jim Chalmers said the government respected the independence of the ACCC and he didn’t intend to weigh in on the matter.