Suncorp makes case for ANZ deal in response to competition watchdog

Suncorp makes case for ANZ deal in response to competition watchdog | Insurance Business Australia

Insurance News

Suncorp makes case for ANZ deal in response to competition watchdog

Determination set to be provided in July

Insurance News

By
Terry Gangcuangco

The Australian Competition and Consumer Commission (ACCC) has published Suncorp Group’s response to the competition watchdog’s statement of preliminary views (SOPV) regarding the sale of Suncorp Bank.

In Suncorp’s response, which was submitted in May but made public by the ACCC just last Friday, the trans-Tasman insurer declared that ANZ’s swoop for Suncorp Bank will not give rise to a substantial lessening of competition. It was noted that, in the overlapping markets in which Suncorp and ANZ compete, Suncorp Bank does not have a material market share position.

The Brisbane-headquartered group, in the 43-page document seen by Insurance Business, said: “The proposed acquisition, a cash sale, will provide Suncorp with an opportunity to be a stronger insurer. Other transactions will not achieve this same result. Insurance businesses in Australia play an integral role in the Australian economy, yet they face significant challenges given volatility in global reinsurance markets and increased insurance capital requirements.

“Suncorp operating as a pureplay insurer will deliver significant public benefits to Queensland and Australia and comes at a time when the value of insurance businesses in Australia, such as Suncorp, has never been greater.”

The ACCC, which released its SOPV in April, will provide its determination on the planned merger next month.

In a new release, Suncorp group chief executive Steve Johnston said: “Our response outlines why we continue to believe there to be no real commercial likelihood of any alternative transaction such as a merger with any other mid-tier bank, and why the proposed transaction with ANZ is in the best interests of our customers, shareholders, employees, and communities.

“Our response also details why we believe the proposed transaction with ANZ would not substantially lessen competition or have a detrimental impact on the competitive environment for customers.”

Meanwhile, a separate response by ANZ has also been made accessible.

“We have closely considered the ACCC’s statement of preliminary views and provided the ACCC with our detailed response, including directly addressing the matters they raised,” ANZ CEO Shayne Elliott said in a recent pronouncement.

“We believe the evidence we have provided clearly demonstrates that the proposed acquisition will not substantially lessen competition and is in the public interest. Indeed, the banking sector is dynamic and competitive, and competition in the banking sector continues to increase.”

Barring any hiccups, the Suncorp-ANZ transaction is expected to be completed in the second half of the calendar year.

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