Federal Treasurer Approves ANZ’s $4.9bn Takeover

Australia’s Federal Treasurer Jim Chalmers has approved ANZ‘s $4.9 billion acquisition of Suncorp’s banking division, overturning the national consumer watchdog’s earlier decision due to competition concerns. The proposal, introduced in 2022, aims to integrate Suncorp’s banking operations into ANZ, allowing Suncorp to focus on its insurance business.

Chalmers has imposed strict and enforceable conditions on ANZ, including maintaining the current number of regional branches nationwide and ensuring no net job losses attributable to the acquisition for three years. Additionally, efforts will be made to secure a commercial agreement with Australia Post for Bank@Post services. Chalmers stated, “These conditions are legally-binding and ensure Australians continue to have access to vital banking services, employees aren’t left behind, and Queensland and Australia benefit from the transaction.”

The Australian Competition & Consumer Commission (ACCC) initially blocked the acquisition on August 4, 2023, citing concerns about increased dominance among the big four banks and reduced competition in the home loan, small to medium-sized business banking, and agricultural banking markets in Queensland. Despite potential cost savings and strategic benefits, the ACCC concluded that these benefits were outweighed by competitive detriments.

ANZ and Suncorp appealed to the Australian Competition Tribunal, which overturned the ACCC’s ruling, finding that the acquisition would not harm competition and could generate public benefits. The tribunal described the ACCC’s concerns over bank coordination as “exaggerated.”

Chalmers cited the tribunal’s decision as evidence of the effectiveness of the administrative merger approval process. He also noted that the acquisition would allow Suncorp to concentrate on its insurance business amid sector-specific challenges, including access and affordability.

ANZ and Suncorp welcomed the decision. ANZ CEO Shayne Elliott assured that Suncorp Bank customers would continue to receive the same service from the same staff and eventually gain access to ANZ’s leading technology.

The acquisition is scheduled for completion by July 31, 2024.