The Australian Competition and Consumer Commission (ACCC) has blocked ANZ Group’s announced $3.2 billion buyout of Suncorp’s banking arm. ACCC Deputy Chair Mick Keogh stated, “The proposed acquisition increases the likelihood that the major banks adopt a ‘live and let live’ approach to each other … instead of competing strongly on price, innovation and the quality of their service.”
The ACCC highlighted concerns that the deal would worsen competition and create an oligopoly market structure. In response, ANZ shares surged 1% and Suncorp shares dropped by 0.6% in the morning trading session. In addition, should the deal proceed to the competition tribunal, it is speculated that its completion may be delayed until mid-2024 instead of the late 2023 timeline the companies initially outlined back when the deal was initially announced a year ago.
Analysts from Citi also voiced their concerns, noting that “If the transaction is abandoned, ANZ avoids a transaction that is increasingly unpopular with investors and gains a material capital surplus.” In response, ANZ is currently looking into alternative options to maintain a competitive edge in the finance sector.
The ACCC’s decision has put the $3.2 billion buyout in jeopardy, highlighting the challenges that the major banks face with competition, innovation and customer service. It remains to be seen how ANZ will respond to this recent development and what the impact may be on the financial industry moving forward.