ANZ acquisition of Suncorp approved following Australian Competition Tribunal decision

After a lengthy wait, ANZ Group (ASX: ANZ) has finally received Australian Competition Tribunal (ACT) approval for its proposed $4.9 billion acquisition of Suncorp Group (ASX: SUN).

ANZ initially entered into an agreement to purchase Suncorp in July 2022, however that move was halted by the Australian Competition and Consumer Commission’s (ACCC) decision not to authorise the acquisition.

On 4 August 2023, the ACCC said it would not authorise the proposed acquisition because it was not satisfied the transaction would not result in a substantial lessening of competition in the supply of home loans nationally, as well as small to medium enterprise banking and agribusiness banking in Queensland and that the claimed public benefits did not outweigh the likely public detriment.

ANZ and Suncorp subsequently applied to the ACT that same month for a review of the ACCC decision.

ANZ chief executive officer Shayne Elliott labelled the ACT decision as a significant milestone and an important step forward in the process to acquire Suncorp.

“However, we still have further conditions to meet,” he said.

“We remain committed to completing the acquisition as soon as possible once all sale conditions are met.”

“Suncorp Bank is a high-quality business with a strong team and excellent customer base and we look forward to bringing them access to the best of ANZ, including our platforms and technology.”

“We strongly believe that the acquisition presents significant opportunities for ANZ, Suncorp Bank and our customers, as well as major public benefits including for Queensland.”

Completion of the acquisition remains subject to legislative amendments by the Queensland Parliament and approval by the Federal Treasurer.

ACCC response

In response to the ACT approval, the ACCC stated it had noted the decision and will reflect on it.

“The tribunal’s decision demonstrates the checks and balances of an administrative merger approval process,” ACCC chair Gina Cass-Gottlieb said.

“The tribunal made findings on fundamental matters that informed our concerns including that the national market for home loans is currently conducive to co-ordination and that material barriers to entry and expansion remain.”

“However, the tribunal didn’t consider that the proposed acquisition would meaningfully impact on the likelihood of co-ordination.”

In its August 2023 decision, the ACCC said it was concerned that the proposed acquisition of Suncorp Bank by ANZ would further entrench an oligopoly market structure dominated by the four major banks.

Based on its review of the material it has before it and some limited new information, the ACCC believes the tribunal is satisfied the transaction would not result in a substantial lessening of competition in any relevant market.

“The tribunal found many of the public benefits claimed by ANZ and Suncorp were either not public benefits or were not specific to the proposed acquisition [but also that] any detriments from the acquisition were uncertain and unlikely to outweigh the integration benefits,” the ACCC stated in its response.

Retail growth opportunity

In July 2022, the ANZ elected to purchase Suncorp in a move aimed at accelerating the growth of its retail and commercial businesses.

The initial bid included $47b in home loans with strong risk profile, $45b in high-quality deposits and $11b in commercial loans.

The ANZ proposed to allocate $15b of new lending as part of its existing renewable lending commitments to support Queensland renewable projects and green Olympic Games infrastructure as well as $10b of new lending for energy projects particularly those targeting bioenergy and hydrogen.