The Australian Competition and Consumer Commission’s (ACCC) much anticipated verdict on the merger between ANZ and Suncorp has been delayed until early next month.
The competition regulator was due to announce its decision on the deal, which was announced over a year ago, on 28 July, following an earlier extension from 12 June.
However, Daniel McCracken-Hewson, general manager, merger investigations at the ACCC, requested that ANZ agree to a second extension in a letter to the bank’s lawyer on 20 July.
“ANZ has previously agreed to an extension to the 90-day timeframe for the ACCC to make its decision by 28 July 2023,” Mr McCracken-Hewson wrote.
“However, since the most recent extension was agreed, there has been further delay, which has affected the progress of the ACCC’s assessment of ANZ’s application.”
Mr McCracken-Hewson pointed out that the ACCC had asked for a response from ANZ to the initial report of independent expert Mary Starks by 30 June and to her supplementary report by 14 July. The regulator later requested ANZ to limit its response to no more than 50 pages.
In her initial report, Ms Starks suggested that the ANZ-Suncorp merger may result in a substantial lessening of competition in the national home loan market, as well as in local and regional markets for agribusiness and SME banking.
Ms Starks also indicated that she could not rule out a substantial lessening of competition in the national markets for transaction accounts and term deposits.
“ANZ chose not to provide a response on 30 June 2023,” Mr McCracken-Hewson said.
“ANZ provided its submission in response to the supplementary report after 11:00pm on Monday 18 July 2023 – more than three days after the date requested by the ACCC, and provided material well in excess of 50 pages, including a new expert report by Patrick Smith.”
According to Mr McCracken-Hewson, the ACCC was concerned about the “limited time” that it had been provided by ANZ to review and evaluate this “substantial new material” by 28 July.
“It is important that the ACCC has the opportunity to meaningfully consider the new information provided by ANZ and take it into account in its decision making,” he said.
As a result, the ACCC considered that an extension to the decision timeframe of two weeks, from 28 July to 11 August, as being “both necessary and appropriate”.
But in response on 21 July, ANZ’s lawyer, Peter Armitage of Ashurst Australia, confirmed the bank was instead “prepared to consent to an extension of seven days to 4 August 2023”.
Merger in ‘the best interest of customers’: Suncorp
In April, the ACCC noted that it was exploring whether the merger would undermine competition across the banking sector. This included considering:
- Whether the proposed acquisition of an established second-tier bank would result in the “potential loss of competitive constraint on the major banks”.
- Whether the deal would give rise to “coordinated effects in one or more relevant markets”.
- Whether the proposal would limit ANZ’s incentives to “compete vigorously” in one or more relevant markets.
- The impact of the proposed acquisition on the potential risk of unilateral effects arising in the supply of agribusiness banking, SME banking, mortgage lending, and retail deposits.
The ACCC was also considering the impact of alternative scenarios — Suncorp Bank remaining under Suncorp Group or being acquired by Bendigo and Adelaide Bank.
ANZ and Suncorp Bank sought to allay concerns surrounding the $4.9 billion deal, noting the potential benefits for customers, including “increased scale to enable continual and more efficient investment in digital transformation and innovation”.
In a statement to the ASX on Monday, Suncorp said it would “continue to support the merger authorisation process” while maintaining the view that the merger is “in the best interests of its customers, shareholders and employees and will deliver public benefits for Queensland and the broader Australian public”.
Last month, ANZ signed an implementation agreement with the Queensland government, with the bank pledging to establish a “major tech hub” in Brisbane, designed to strengthen the state’s local sector, generate career opportunities, and facilitate innovation.
Subject to receiving necessary approvals, Suncorp noted that it expects the sale of Suncorp Bank to be completed by the end of the 2023 calendar year.
