Following a six-month due diligence period, AvSuper and the Commonwealth Superannuation Corporation (CSC) have determined that their intended merger presented too many complexities.
In a statement on Wednesday, the funds informed that they would not be proceeding with the merger.
At the outset of the due diligence, both parties acknowledged that the merger would require government approval and the passage of any necessary legislation through Parliament.
It was soon determined that the merger “could not be accommodated” within the existing policy and legislative framework for the Commonwealth’s superannuation arrangements, the CEO of CSC, Damian Hill, acknowledged on Wednesday.
Mr Hill noted that he “appreciated the openness and willingness to share information shown by AvSuper that gave both funds deep insights from the merger process.”
AvSuper CEO Michael Sykes similarly thanked CSC for its participation in the due diligence process.
“It’s disappointing that the merger with CSC will not be proceeding further however our members need certainty around AvSuper’s future,” Mr Sykes said.
“We thank CSC for their time and consideration of the benefits that a merger could bring to both parties.”
Last year in May, the funds said they had inked a Memorandum of Understanding (MoU) that would kick off a due diligence period.
“After a comprehensive and highly competitive expression of interest process, we see CSC as the right partner to manage our members’ superannuation into the future,” Mr Sykes said at the time.
Members of the public offer fund, AvSuper, were expected to benefit from CSC’s $60 billion scale in investments, while current and former Australian government employees and Australian Defence Force (ADF) employees and veterans were said to gain a larger, more diversified customer base.