The Australian Competition and Consumer Commission (ACCC) has again blocked National Australia Bank's proposed acquisition of AXA Asia Pacific.
The ACCC said it maintained its initial opposition of the bid on the basis that NAB's revised bid, which included divesting AXA's North platform to IOOF, did not "provide sufficient certainty that the ACCC's competition concerns will be addressed".
The ACCC considered that IOOF did not have sufficient distribution capability to provide an effective competitive constraint on existing key players in the foreseeable future, and as such, competition, particularly in the retail investment platform space, would be constrained if NAB's proposed acquisition was allowed to proceed.
In announcing the decision ACCC deputy chairman Peter Kell said the Commission had considered NAB’s proposed undertakings and had received feedback regarding that proposal from a range of industry participants, including financial planners, dealer groups, investment product providers and other market participants.
“The majority of these participants raised concerns that the proposed undertakings would not provide for an effective competitive constraint on a merged NAB/AXA or other major platform providers,” Kell said.
Kell added the undertakings placed a “heavy reliance” on IOOF having sufficient distribution capability to provide the competition needed to quell the ACCC’s concerns.
However, Kell noted NAB’s undertaking did not include the distribution network of financial planners or the North products that currently support the North platform, therefore directly impacting the “ongoing viability and competitiveness of the divestiture business”.
The ACCC was also concerned that the undertakings were dependent on third parties to “complete certain actions, and involve complex and long term behavioural obligations that present risks”.
"The ACCC found that, together, these factors raised considerable uncertainty as to whether the proposed purchaser operating the North platform administration business would be able to provide an effective competitive constraint to a combined NAB-AXA, and thereby restore competition lost should the proposed acquisition proceed," Kell said.