SYDNEY — Australia’s competition regulator has rejected ANZ’s proposed 4.9 billion Australian dollars (US$3.21 billion) acquisition of Suncorp’s banking unit.
The Australian Competition and Consumer Commission on Friday said it had decided not to grant merger authorization as it wasn’t satisfied the acquisition wouldn’t substantially lessen competition in Australia’s home-loan market.
“We consider there is an increased likelihood of coordination between the four major banks in the supply of home loans should Suncorp Bank become part of ANZ. Coordinated market outcomes mean competition is muted at best, to the detriment of customers,” said ACCC Deputy Chair Mick Keogh.
The ACCC issued its determination and an executive summary on Friday, and said it expected to issue its full reasons on Monday.
in July last year agreed to buy Suncorp’s
bank, saying it could accelerate the growth of its retail and commercial businesses.
Some industry participants believed the merger could reduce competition in Australia’s banking sector. ANZ and Suncorp Bank offer retail and business banking products and services in Australia, including home loans, deposit products and business banking.
ACCC on Monday said it was particularly concerned about competition in small to medium-sized business banking in tropical Queensland state if the deal was to be approved. It also said, with respect to agribusiness, removing Suncorp Bank’s presence would likely lead to worse offerings to Queensland farmers.
While the ACCC accepted ANZ would benefit from cost savings from the proposed acquisition, it considered those benefits did not outweigh the likely detriments.
Authorization decisions by the ACCC can be appealed to the Australian Competition Tribunal.