ANZ has chosen an unusual route to gain clearance from the Australian Competition and Consumer Commission (ACCC) for its Suncorp acquisition, opting to go through a formal authorisation process that means public benefit will also be considered.
Most big mergers are considered via an informal clearance process where the sole test is whether the deal results in a substantial lessening of competition.
This time, if the takeover did breach that test but was deemed to be in the public benefit then it would be cleared.
The formal route also comes with a more precise timetable of 90 days from the day it is lodged with the ACCC, and can be appealed to the Competition Tribunal where the ACCC has a poor record.
The ANZ camp rightly thinks on the numbers the deal will have little trouble passing the lessening of competition test, but is proceeding down the authorisation path because it is more transparent.
However, some say ANZ is perhaps not as sure as it makes out, which explains the authorisation route.
TPG is following a similar path with its planned mobile phone sharing deal with Telstra and so far it has received 93 submissions, which are all on the public record.
Optus is leading the charge against the deal, which would cut regional mobile competition because TPG will effectively be piggybacking off Telstra. That is bad news for regional Australia.
On its public register for the ANZ deal, the ACCC notes it “can grant merger authorisation if it is satisfied that either the proposed acquisition would not be likely to have the effect of substantially lessening competition, or the likely public benefit resulting from the proposed acquisition would outweigh the likely resulting public detriment”.
The takeover of a regional bank by one of the majors can be controversial, but in this case ANZ is the laggard of the big four and Suncorp is no maverick, so the argument is a little more muted.
But ANZ’s lawyers at Ashurst clearly want to play it safe and have every objection on the table.
In an informal clearance process, opponents can go behind closed doors to put their case while running a different line publicly. Often competitors play this game to avoid being seen as opposing a deal which may rebound on them at a latter stage.
While the Suncorp deal won’t radically change the landscape it is one more consolidation in banking and Australian industry in general. That is arguably not in the public interest.
Once APRA and the ACCC have reviewed the deal, the final decision rests with the Treasurer — a Queenslander in Jim Chalmers .
This maybe one more reason to put all proceedings on the public record given the often troubled relationship between the big banks and Canberra.
That said, it is difficult to see how the ACCC can block this deal on competition grounds and if it clears that hurdle then the public test will not be invoked.
John Durie has been a business reporter for 40 years, starting his career in the Canberra Press Gallery in 1980. John worked for 13 years as Chanticleer Columnist for the AFR, four years as business columnist for the New York Post, and also worked in Paris.
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