No sunshine from ACCC
MERGERS AND ACQUISITIONS
Need To Know
- ACCC deny ANZ’s request to acquire Suncorp Bank
- Decision to be appealed with the Australian Competition Tribunal
- We still consider SUN a seller of its Bank, potentially at a lower sale price to an interested party BEN. Strategically this is a better outcome than retaining the bank
Investment Implications
ACCC is not satisfied that the acquisition would not “substantially lessen competition” in the supply of national home loans, SME banking, and QLD agribusiness banking.
“Proposed acquisition of Suncorp Bank by ANZ would further entrench an oligopoly market structure that is concentrated”.
ANZ will appeal the ACCC rejection to the Australian Competition Tribunal (ACT), a process which can take up to 4 months. The ACT appeal process will consider the merits of the information provided to the ACCC.
If the ACT appeal process fails, we believe SUN will continue to push ahead with the sale of the Bank. Bendigo and Adelaide Bank (BEN) are likely to be interested parties. One that the ACCC would be more comfortable approving. Albeit likely at a lower price vs the $4.9bn or 1.3x book that ANZ Group (ANZ) were willing to pay.
The SUN share price has rallied hard over the last 12 months, powered by a strong insurance market and prospect for capital management post the Bank divestment. With delays and further uncertainty over the months ahead, our Buy rating is now under review.
Stock Overview
Share Price
Company Overview
SUN is an Australia-based company that provides insurance, banking, wealth products and services through various brands in Australia and New Zealand.
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