The Australian Competition and Consumer Commission (ACCC) will block the proposed acquisition of AXA Asia Pacific Holdings (AXA) by National Australia Bank Ltd’s (NAB) in favor of a bid by AMP Limited (AMP).
The ACCC, after four months of investigations into the proposals of both AMP and NAB for AXA has concluded that in the interests of innovation and competition among financial services companies, a merger between AMP and AXA would be better for consumers.
“At the heart of the ACCC’s decisions are concerns about innovation, and as a consequence future rigorous and effective competition between retail investment platforms,” ACCC chairman Graeme Samuel said yesterday.
While the ACCC found no issues for competition for the merged entity in the superannuation, insurance and banking markets, there were concerns about retail investment platforms which provide a central hub for investors to access a range of investment products, and allow for consolidation of client
information and reporting on these assets.
The ACCC concluded a merger between NAB and AXA would result in a substantial lessening of competition in the market for retail investment platforms for investors with complex investment needs.
However, the ACCC found that an independent AXA or a merger between AMP and AXA would not have this effect.
“The ACCC concluded that because AMP does not own its own wrap platform it is constrained in its ability to compete aggressively,” Mr Samuel said.
“Allowing NAB and AXA to merge would significantly diminish incentives to compete for retail investment platforms used by investors that have complex financial needs,” he said.
After the ACCC’s announcement, NAB issued their own statement:
National Australia Bank (NAB) today acknowledged the decision by the Australian Competition and Consumer Commission to object to the proposal by NAB to acquire the Australian and New Zealand businesses of AXA Asia Pacific.
NAB will review the ACCC decision in detail before making any further comment.
