ACCC to oppose NAB bid for AXA and to clear AMP bid

Published Tuesday, 20 April 2010

The Australian Competition and Consumer Commission (ACCC) has decided to oppose National Australia Bank Ltd's (NAB) proposed acquisition of AXA Asia Pacific Holdings (AXA), and not to oppose AMP Limited's (AMP) proposed acquisition.

"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," ACCC chairman Graeme Samuel said.

The ACCC found that a merger between NAB and AXA would result in a substantial lessening of competition in the market for retail investment platforms for investors with complex investment needs. However, the ACCC found that an independent AXA or a merger between AMP and AXA would not have this effect.

The ACCC found that NAB is a significant competitor in the provision of retail investment platforms for investors with complex needs. The ACCC 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. As a result, the ACCC considered that a merger of NAB and AXA would remove competitive tension.

By contrast, the ACCC found that AMP was not a significant competitor for retail investment platforms for investors with complex investment needs.

"The ACCC concluded that because AMP does not own its own wrap platform it is constrained in its ability to compete aggressively," Mr Samuel said.

"Allowing NAB and AXA to merge would significantly diminish incentives to compete for retail investment platforms used by investors that have complex financial needs," he said.

In the absence of competitive pressure from AXA's platform, the ACCC considered that existing platform providers were either unlikely to have the incentive to drive innovation in the foreseeable future, or lacked the capacity to do so.

20 April, 2010