The Australian Competition Tribunal has reversed the Australian Competition and Consumer Commission's (ACCC) decision to obstruct Australia and New Zealand Banking Group (ASX:ANZ)'s (ANZ) A$4.9 billion acquisition of Suncorp Bank.
The decision allows ANZ to purchase Suncorp's banking operations in Queensland, potentially transforming the banking industry's competitive dynamics and establishing a benchmark for evaluating future banking mergers.
Deputy president and Federal Court Justice John Halley, summarising the tribunal's decision, stated that the merger was unlikely to significantly reduce competition in Queensland's home loan and business markets.
“The tribunal has concluded that the small increase in the market share of ANZ, if the proposed acquisition proceeds, would not have a meaningful impact on the degree of likelihood of the major banks engaging in successful coordination,” he said.
The tribunal has decided to grant "unconditional merger authorisation".
Justice Halley further noted the merger was expected to yield net public benefits, citing anticipated efficiencies and integration benefits that outweigh potential competitive detriments.
“The tribunal is satisfied that the proposed acquisition represents a net public benefit because any detriments arising from any reduction in competition are unlikely to be sufficiently certain and significant to outweigh the more certain integration and productive efficiencies forecast to arise from the proposed acquisition,” Halley said.
ANZ Qld footprint expands
This merger not only strengthens ANZ's position in Queensland but also allows Suncorp to concentrate on its principal insurance operations, despite losing the stable income from its banking sector.
The consolidation sets a precedent for evaluating banking antitrust issues, potentially encouraging mergers among regional banks facing competitive and inflationary pressures.
The acquisition promises significant investment in Queensland, with ANZ pledging up to A$35 billion in the state, albeit with anticipated job reductions as it integrates Suncorp Bank.
ANZ CEO Shayne Elliott expressed commitment to finalising the acquisition quickly, pending all necessary approvals.
The transaction's completion is awaiting approval from Treasurer Jim Chalmers and potential legislative adjustments by the Queensland Parliament. Chalmers stated that the decision would be made in the national interest, following thorough consideration of ANZ's application and Treasury advice.
Suncorp's chairman Christine McLoughlin committed to cooperating with government bodies to obtain the remaining approvals.
The full tribunal decision, including contributions from former ACCC commissioner Jill Walker and Diana Eilert, will be disclosed after a confidentiality period, with the parties having the opportunity to request information redactions.