The Australian Competition and Consumer Commission (ACCC) has announced it will seek market feedback on the undertakings submitted to it by NAB to address ACCC concerns over NAB’s proposed acquisition of AXA Australia and New Zealand.
The key objection by the ACCC to the proposed acquisition is that ’… a merger of NAB and AXA would likely result in a substantial lessening of competition in the market for the supply of retail investment platforms for investors with complex investment needs.’
The solution proposed by NAB to address this key objection is that the AXA North investment platform would be sold to IOOF, thereby appeasing the ACCC’s concerns about a lessening of competition in this space.
Over the next two weeks, the ACCC will be:
- Seeking views from market participants to assist its consideration of the NAB/AXA undertakings
- Seeking views regarding IOOF as the proposed purchaser of the AXA North business
- Determining whether the proposed divestiture would be likely to alleviate the ACCC’s competition concerns
The ACCC has asked any interested parties to make submissions to it by 23 August 2010, after which it will consider its position. It has set 9 September 2010 as the date on which it will announce its decision.
… the proposed undertaking would see AXA divest the North platform administration service, but retain ownership of the existing products…
Following the announcement of the ACCC’s two-week consultation process, MLC’s Chief Executive Officer, Steve Tucker, sent a message to advisers providing details of the consultation. Mr Tucker clarified that the proposed undertaking would see AXA divest the North platform administration service, but retain ownership of the existing products that reside on the platform.
In the same message to advisers, Mr Tucker supported the selection of IOOF as the buyer of the North platform, describing the company as a top ten Australian financial planning group with 640 advisers, $25bn in funds under administration and $30bn in funds under management.
Mr Tucker also observed “… IOOF has the experience, distribution capacity and commitment to continue to develop the North Platform and realise its capability as a substantial competitor in the platform space.”
If, after the consultation process, the ACCC reverses its 19 April decision to oppose the NAB/AXA proposal, the final hurdle to the deal will be to secure approval from the Treasurer of whichever party will form Government following the August 21 Federal Election.
“Our objective throughout this entire process has been to build an even stronger wealth management company which can help many more Australians to grow and protect their wealth through the delivery of quality financial advice, supported by market leading investment, insurance and superannuation products,” said Mr Tucker.
