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National Australia Bank (NAB) is considering its options in the wake of the Australian Competition and Consumer Commission’s (ACCC’s) decision to oppose its acquisition of AXA Asia Pacific.
In the immediate aftermath of the announcement of the ACCC decision, NAB issued a brief statement saying it would be reviewing the decision.
However, the big banking group only has limited options. It can seek discussions with the regulator to find a way to satisfy the ACCC’s concerns, it can challenge the decision in the courts, or it can withdraw its bid.
According to key analysts, the ACCC’s decision has placed AMP in the box seat to acquire AXA Asia Pacific — but AMP will not be required to make a formal move until NAB has exhausted its options.
While NAB — which has spent millions of dollars in mounting its bid for AXA Asia Pacific — has the option of contesting the ACCC’s decision in the courts, such a challenge would be likely to take many months and would leave the future of AXA Asia Pacific in prolonged limbo.
Analysts point to the fact that the ACCC’s decision to block NAB’s bid was based almost entirely on its concerns about further consolidation in the platforms market, particularly with respect to wraps.
The chairman of the ACCC Graeme Samuel told ABC radio today that the regulator’s decision was based on its concern about the removal of competition in the provision of retail investment platforms.
He specifically referenced NAB’s ownership of the Navigator platform and the competitive potential of AXA’s North product.
“We were concerned that, if NAB were to take over AXA, then that drive, that incentive for competition and innovation would be removed and that would have substantially lessened competition in that market,” Samuel said.
The ACCC chairman said it would be wrong to interpret the regulator’s decision as a sign that it would be taking a negative view of future mergers in the financial services industry.
