ACCC blocks NAB's bid for AXA

The Australian Competition and Consumer Commission (ACCC) has blocked National Australia Bank's (NAB's) bid for the Australian and New Zealand arms of AXA Asia Pacific, and has backed AMP's proposal instead.

ACCC chairman Graeme Samuel said at the heart of the decision were concerns about competition between retail investment platforms.

The ACCC said a merger between NAB and AXA would result in a substantial lessening of competition in the retail investment platform market, particularly where investors with complex investment needs are concerned.

The ACCC acknowledged NAB's strong competitive stance in that space.

“The ACCC also found that AXA is on the cusp of delivering an innovative platform that is likely to provide aggressive competition for investors with complex investment requirements. As a result, the ACCC considered that a merger of NAB and AXA would remove competitive tension.”

The ACCC said AXA is now at an advanced stage in the development of a “low cost, full function retail investment platform”. AMP, meanwhile, is currently without its own wrap platform.

“The ACCC considers that this evidence increases the likelihood of AXA, or a merged AMP and AXA, competing strongly in the future.”

The ACCC began seeking further information about the implications of potential changes to platform ownership in the wake of the publication of data in Money Management, and elsewhere, that revealed the full extent of platform consolidation and what was likely to occur in the event of a successful NAB bid.

AMP chief executive Craig Dunn said the decision represented a "great outcome for Australian consumers", with the group adding an AMP/AXA merger would create a fifth pillar in financial services.

In a short statement to the Australian Securities Exchange, NAB acknowledged the ACCC's decision but said it would review the findings in detail before making any further comment. In all public communication, including a recent company update by NAB chief executive Cameron Clyne, the company has appeared confident in the success of its bid.

The independent directors of AXA Asia Pacific have been strongly supportive of NAB's proposal and have never accepted AMP's, which they considered undervalued the group's Asian businesses.

AXA AP's independent directors tonight said they noted the decision, but had not yet had the opportunity to evaluate it. Instead, they pointed to the fact that NAB can enter into further discussions with the ACCC regarding its proposal.

The ACCC said it had reviewed the potential competitive impact of a NAB acquisition of AXA across the broader superannuation, insurance and banking sectors, but had not identified any competition concerns with respect to those markets.