ANZ-Suncorp merger appeal to be handed down today

The Australian Competition Tribunal is set to announce its decision today regarding the proposed merger between Australia and New Zealand Banking Group Limited (ANZ) and Suncorp Group Limited, marking a pivotal moment in the ongoing saga surrounding the multibillion-dollar acquisition.

Scheduled for 9:00 am (AEDT) today at the Federal Court of Australia in Sydney, the decision will be handed down by a panel comprising deputy president Justice Halley, along with members Dr J Walker and Ms D Eilert.

The tribunal’s decision followed a nine-day hearing that commenced on 4 December, delving into the ramifications of the merger and scrutinising the Australian Competition and Consumer Commission’s (ACCC) earlier decision to refuse the acquisition.

During the hearings, counsel Ruth Higgins SC, representing ANZ, argued vehemently against the ACCC’s rejection of the merger, labelling it a “fatal mistake”. Ms Higgins contended that the ACCC’s decision was erroneous as it failed to adequately consider the evolving competitive landscape within the banking sector, particularly in light of technological advancements and regulatory changes.

Furthermore, ANZ’s submission emphasised that the merger would not substantially alter competitive dynamics and would lead to public benefits, including improved performance in Suncorp’s insurance sector and potential cost savings.

At the heart of the dispute lies the ACCC’s concerns over potential harm to competition, particularly in home loans, small- to medium-sized enterprise (SME) banking, and agribusiness banking in Queensland.

Mick Keogh, the ACCC’s deputy chair, had previously expressed apprehensions regarding the creation of an oligopoly dominated by the four major banks and the subsequent limitations on competition.

In August 2023, the ACCC formally rejected the merger proposal, citing fears of reduced competition in critical banking markets. The decision stemmed from concerns that the acquisition would exacerbate the dominance of the major banks, stifling competition and ultimately leading to unfavourable outcomes for consumers.

At the time, the ACCC suggested the acquisition of Suncorp Bank would boost ANZ’s market share in home loans to be above NAB and closer to the Commonwealth Bank and Westpac.

As at June 2023, ANZ’s owner-occupied book was $186.5 billion and its investor loan book was $93.6 billion. It was the smallest of the big four banks. Suncorp, meanwhile, had $36.6 billion in owner-occupied loans and $14.7 billion in investor loans at the end of June 2023.

ANZ, however, has remained steadfast in its pursuit of the merger, asserting that it would continue to be the smallest among the major banks even post-acquisition and would not diminish incentives to compete vigorously for customers.

Both the Suncorp and ANZ chief executives have frequently shown optimism about the merger’s potential to benefit consumers and foster growth.

[Related: ACCC made ‘fatal mistake’ in blocking ANZ/Suncorp merger: ANZ counsel]