Australia blocked ANZ Group's $3.2 billion Suncorp banking deal

Australia blocked ANZ Group’s $3.2 billion Suncorp banking deal

Australian regulator blocked ANZ Group Holdings Ltd.’s A$4.9 billion ($3.2 billion) deal to buy the banking arm of Suncorp Group Ltd.., citing competition concerns.

The Australian Competition and Consumer Commission decided not to grant merger approval for the acquisition, the regulator said in a statement on Friday.

We are not satisfied that the acquisition will not substantially reduce competition in the supply of mortgage loans nationwidesmall and medium-sized business banking in Queensland and agribusiness banking in Queensland,” Accc deputy chairman Mick Keogh said in the statement.

The bank had agreed in July last year to buy the banking operations of the Brisbane, Queensland-based firm in a bid to gain an advantage over its rivals. Competition has remained fierce in Australia’s mortgage market as interest rates have risen over the past year.

Naturally, we are disappointed and do not agree with the ACCC’s decision.“ANZ chief executive Shayne Elliott said in a separate statement. “We are closely reviewing the determination and will seek an independent decision through the review avenues available to us.”

The ACCC pointed out that the agreement would reduce competition and would increase the possibilities of coordination between the four main banks in the country in the offer of mortgage loans.

A substantial decrease in competition in home lending would have a major impact on Australians with a mortgageKeogh said. “More than a third of Australian households have a mortgage, with loans totaling around $2 trillion, illustrating how critical it is that competition in this market does not diminish substantially.”

Next steps

Suncorp said it would fully support ANZ in the next step in the merger clearance processreferring the Accc’s decision to the Australian Competition Tribunal, according to a separate statement.

More detailed reasons for the decision will be released on Monday following confidentiality checks, the Accc said.

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