ACCC rejects ANZ-Suncorp sale, so we answer your questions

Customers and investors have plenty of questions about the takeover, the ACCC’s rejection and what comes next. Here are a few answers.

It’s back to the drawing board - an off to an appeals tribunal - for ANZ and Suncorp after the Australian Competition and Consumer Commission rejected ANZ’s $4.9bn bid for Suncorp’s banking business.

While ANZ’s Plan B is yet to be revealed, an eventual takeover remains on the table until it says otherwise or its appeal is rejected too.

Customers and investors have plenty of questions about the takeover, the ACCC’s rejection, and what comes next. Here are some answers.

Why was Suncorp merging with ANZ?

It was not a complete merger, as ANZ only wanted Suncorp’s banking business and would leave its giant insurance arm operating as a separate company.

And as for why – it’s about money, and size. ANZ wants to beef up its traditional banking business including mortgages, where it lags the other three major banks CBA, Westpac and NAB.

What bank owns Suncorp now?

Suncorp is not owned by a bank – its owners are shareholders and it has been listed on the Australian Securities Exchange since 1988.

It traces its history back to 1902 with the opening of Queensland Agricultural Bank, was once government owned, merged with Metway Bank in 1996, and again with Promina Group in 2007, before the ANZ deal in 2022 that it says will let it focus on becoming “a leading trans-Tasman insurer”.

Why did the ACCC reject the deal?

In a statement, the ACCC said it was not convinced that the deal would not lessen competition in home loans and business banking, and that it was concerned that the major banks might co-ordinate market outcomes to the detriment of customers. It said it would release its full reasons for its rejection on Monday.

“If ANZ doesn’t acquire Suncorp Bank it will remain the smallest of the major banks, giving it a stronger incentive to disrupt any co-ordination in the market,” ACCC deputy chair Mick Keogh said.

Would there be job losses?

ANZ committed to no net job losses in Queensland for at least three years, as part of its attempt to please regulators and also the Queensland government, which approved the deal in June. However, that did not mean that ANZ employees in other states would not be affected.

The Finance Sector Union said the deal meant “the end of job security for thousands of Queensland members once that three years is up”, while ANZ said it expected there would be $260m in cost savings within four years.

What does it mean for customers?

ANZ committed to closing no branches for at least three years, and said the Suncorp banking brand would continue.

ANZ wants to boost its Australian banking business. Picture: NCA NewsWire/Damian Shaw

However, the national trend of branch closures is not going anywhere, and Suncorp’s key banking market of Queensland will feel it the most in the future, with more than 20 banks in regional Queensland closing or being threatened with closure since September 2022.

What does it mean for shareholders?

ANZ raised $3.5 billion from shareholders last year to help fund the purchase, and since then there have been claims that it may have overpaid by 30 per cent because of weakness in regional banks’ share prices. What it does with that money now remains to be seen.

Both companies said the deal delivered long-term value, although some analysts may now say that ANZ investors get a short-term win from the ACCC’s rejection.

What happens to the rest of Suncorp?

It would have remained an Australian insurance giant with a share market value of more than $12bn once the banking business was hived off. But now it remains a $17bn company – until whatever takeover action comes next.

Suncorp Group owns insurance brands including AAMI, GIO, Shannons, Apia, Vero and the Suncorp brand that it says will continue to offer the same service to Queenslanders.

Would there be a name change?

Not for a while, at least, and possibly never. ANZ and Suncorp committed to maintain the presence of Suncorp Bank in Queensland, and agreed to licence the Suncorp brand for the banking business for five years after the deal is completed. If that licence is extended, Suncorp Group would get $10 million a year.

Where would the HQ be?

ANZ intended to run the banks as a separate business to minimise disruption for at least three years, although as ANZ is headquartered in Melbourne, and is the purchaser, that was where the big decisions would have been made in the future.

Big four banks already own plenty of smaller brands and have maintained them for years. Think Westpac with St George, Bank of Melbourne and BankSA - although these smaller banks’ home loan interest rates are often identical to their big four bank parent.

What happens next?

We are waiting to hear the ACCC’s full explanation. Suncorp and ANZ both said they were disappointed by the decision and it would be referred to the Australian Competition Tribunal.

Suncorp’s full-year financial results will be released on August 9, and that will give ANZ investors a better look at the bank they were trying to buy.

This deal is not over yet, but if it ultimately fails ANZ has billions of dollars to buy something else if it wants, and Suncorp shareholders won’t get the proceeds of the sale they had been promised.

Why did the ACCC approval take so long?

Nerves about the deal succeeding were frazzled when the ACCC requested an extension of its review period in April, and again in July when it blamed ANZ for delays and unwieldy responses.

Moves by Bendigo and Adelaide Bank to block the deal, so it could merge with Suncorp instead, muddied the sale and ACCC approval process, but Suncorp stuck with ANZ. The ACCC favors a Bendigo-Suncorp merger, so will Bendigo now make a move? Time will tell.

Is the ACCC too powerful?

No. While it may cop criticism for this latest move, especially as it allowed other regional banks to merge with big four banks in the past, the ACCC is Australia’s independent consumer regulator and its job is to promote fair trade, look after the little guy, and stop anti-competitive business conduct. Without it, big businesses could run rampant swallowing up smaller operators and pushing up consumer prices amid a lack of competition.