ACCC opposes NAB's play for AXA

National Australia Bank Ltd (NAB) is reviewing the competition watchdog's decision
to oppose its proposed takeover of AXA Asia Pacific Holdings and give a rival offer
from AMP Ltd the thumbs up.
NAB has offered $14 billion for AXA, while AMP has bid $12.85 billion for the
insurance and superannuation giant.
The Australian Competition and Consumer Commission (ACCC) said in a statement on
Monday it opposed the bank's proposal but did not oppose AMP's planned acquisition
of AXA.
The ACCC found that NAB was a significant competitor in the provision of retail
investment platforms for investors with complex needs whereas AMP was not a
significant competitor in this space.
NAB said in a statement late on Monday that it would review the ACCC decision in
detail before making any comment.
AXA said it too had not yet had the opportunity to evaluate the ACCC decision but
would so "over the coming period".
However, AXA noted that NAB could enter into further discussions with the ACCC about
its proposal.
Under the implementation agreement signed by AXA and NAB on March 30, the bank has
six weeks to reach a satisfactory conclusion with the ACCC before the agreements can
be terminated.
AMP on Monday welcomed the ACCC's findings "as a great outcome for Australian
consumers".
"A merger of AMP and AXA APs (Asia Pacific's) Australian and NZ operations would see
the creation of a fifth pillar in the critically important financial services
sector," AMP said in a statement.
"AMP continues to believe it can put forward a proposal that is financially
disciplined and will create value for its shareholders, and which the independent
directors of AXA AP will be able to recommend to their minority shareholders."
AMP chief executive Craig Dunn said a combined AMP-AXA Asia Pacific would "provide
an even stronger, non-bank competitor in financial services that Australian
consumers deserve".
University of New South Wales associate professor Frank Zumbo said the ACCC had made
the correct decision and it was very important that a "fifth pillar" was encouraged
to challenge the dominance of Australia's four major banks.
"That's where an AMP/AXA would fit in perfectly - in leading to the emergence of a
fifth pillar," Prof Zumbo, an expert in competition and consumer law, told AAP.
AXA plans to develop a low-cost, full-function retail investment platform, which
meant it would be competing against NAB, he said.
"If NAB was allowed to takeover AXA, that would spell the end of competition in a
real and practical sense on the basis that AXA is working on developing a retail
investment platform, which is a very important driver of competition.
"It's basically an information system platform, which allows a financial
institutions to manage the investment needs of investors ... you have information
about the client, about your financial products, term deposits and what have you.
"It allows financial institutions to interface with financial advisers."
Prof Zumbo said the ACCC had sent a strong message that taking over competitors
would not be allowed.
The target's French parent company last month agreed to NAB's offer of $4.6 billion
as part of a proposal to acquire all of the shares in AXA Asia Pacific. AXA also
agreed to NAB buying the Asian businesses of AXA Asia Pacific for $9.4 billion.