The Australian Competition and Consumer Commission (ACCC) has announced its intention to oppose the takeover of AXA Asia Pacific by National Australia Bank, at the same time endorsing AMP’s rival takeover offer.
At the heart of the ACCC’s decisions are concerns about innovation…
“At the heart of the ACCC’s decisions are concerns about innovation, and as a consequence future rigorous and effective competition between retail investment platforms,” said ACCC Chairman, Graeme Samuel.
In handing down its decision, the ACCC found that NAB is a significant competitor in the provision of retail investment platforms for investors with complex needs, and 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.” For this reason, the ACCC considered that a merger of NAB and AXA would ‘…remove competitive tension.’
In contrast to NAB’s proposal, Mr Samuel said the ACCC concluded that because AMP does not own its own wrap platform it is constrained in its ability to compete aggressively.
AXA on its own or an AMP-owned AXA would continue to drive innovation…
The ACCC concluded that ‘…AXA on its own or an AMP-owned AXA would continue to drive innovation, particularly with respect to platform functionality, and deliver the benefits that flow in the form of enhanced services to financial advisers and their clients.’
AMP’s vision of creating a non-bank fifth pillar in the financial services sector has been given a boost as a result of the ACCC’s decision, with Chief Executive Officer, Craig Dunn, welcoming the ACCC’s determination that competition would be best served by AMP’s proposal: “We have always believed that a combined AMP-AXA AP group would provide an even stronger, non-bank competitor in financial services that Australian consumers deserve,” said Mr Dunn.
In a brief initial response, NAB has acknowledged the ACCC’s announcement, saying it will review the decision before commenting further.
