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ACCC Rejects NAB Acquiring AXA

The Australian Competition and Consumer Commission today decided to reject the proposed undertakings offered by National Australia Bank Limited (NAB) and AXA Asia Pacific Holdings Ltd (AXA). "The proposed undertakings offered by the parties do not provide sufficient certainty that the ACCC's competition concerns will be addressed," ACCC deputy chairman Peter Kell said today. The ACCC issued its decision to oppose the proposed acquisition of AXA by NAB in April this year, and remains opposed because it would be likely to result in a substantial lessening of competition in the relevant retail investment platform market. In order to remedy the ACCC's concerns, NAB and AXA proposed undertakings providing for the divestiture of the North platform administration business carried out by AXA to the proposed purchaser, IOOF Holdings Limited. The ACCC has considered the proposed undertakings and received information from a range of industry participants, including financial planners, dealer groups, investment product providers, and other market participants. The majority of these participants raised concerns that the proposed undertakings would not provide for an effective competitive constraint on a merged NAB/AXA or other major platform providers. "The undertakings as proposed place a heavy reliance upon IOOF having sufficient distribution capability to provide an effective competitive constraint upon existing key players in the foreseeable future." "The proposed undertakings do not include the distribution network of financial planners or the North products (which provide scale by way of funds under management) that currently support the North platform. The exclusion of distribution assets and the North products in the proposed undertakings impacts directly on the ongoing viability and competitiveness of the divestiture business. The proposed undertakings are also dependent on third parties to complete certain actions, and involve complex and long term behavioural obligations that present risks. "The ACCC found that, together, these factors raised considerable uncertainty as to whether the proposed purchaser operating the North platform administration business would be able to provide an effective competitive constraint to a combined NAB-AXA, and thereby restore competition lost should the proposed acquisition proceed," Mr Kell said. The basis upon which the ACCC reached its decisions is outlined in a Public Competition Assessment which is available on the ACCC's website