Tribunal says government input on ANZ-Suncorp deal is in the public’s interest
Australia’s competition tribunal will allow the Queensland government to intervene in a legal challenge in support of the $4.9bn ANZ-Suncorp Bank merger.
Australia’s competition tribunal has given the green light for the Queensland government to intervene in a legal challenge, in support of the $4.9bn ANZ-Suncorp merger.
Australian Competition Tribunal deputy president Justice John Halley on Friday granted leave for the state government to intervene on “public interest” grounds in the upcoming hearing that will decide the fate of the contested deal.
The Queensland government’s decision to weigh in could be crucial as the tribunal considers whether the Australian Competition and Consumer Commission’s decision to reject the deal is valid or whether an appeal by ANZ and Suncorp should be allowed.
Justice Halley, in a directions hearing, said the state government could make written submissions to support the deal that promises to pump up $35bn into the Queensland economy through additional lending capacity.
According to an affidavit lodged by the government, Suncorp and ANZ had made a number of “binding employment, financial and investment commitments” which would take effect after the completion of the deal.
These included ensuring Suncorp keeps the bulk of its insurance workers in Queensland for at least the next decade and an undertaking by ANZ to put $15bn into new lending to support “green” Olympic Games infrastructure and renewables projects.
“In negotiating these commitments, the approach was to secure meaningful benefits for the state,” according to the affidavit.
“The employment commitments directly address a series of well-known areas of the government’s focus, including preventing job losses, targeting employment in technology-related areas and maximising regional jobs opportunities.”
The affidavit reveals that Queensland Treasury officials and the banks negotiated the undertakings over a seven-month period after the deal was announced in 2022.
Along with the $15bn commitment to a green Olympics, ANZ has undertaken to commit a combined $20bn of lending to small and medium-sized businesses, and energy projects such as hydrogen and bioenergy.
Whether new lending is provided will depend among other things on ANZ’s “credit and risk assessment of borrowers, competition from other lenders and regulatory requirements”.
The ACCC decision in August to stop the ANZ-Suncorp tie-up caused political ructions in Queensland and some interpreted it as being imposed by southern-based regulators not attuned to the needs of a regionally diverse state.
ANZ holds 13.02 per cent of the home loan market in Australia and Suncorp is considerably smaller with 2.39 per cent. Queensland has other regional banking, including Heritage, Auswide, BOQ and Great Southern Bank.
However, the competition watchdog decided it was not satisfied the deal was in the public interest and was “not likely to substantially lessen competition” in the supply of home loans nationally, small to medium-enterprise banking in Queensland and agribusiness banking in the state.
The decision to offload the bank to ANZ was part of Suncorp’s long-term strategy to become a pure insurance group because the banking business was too small to compete against the big four.
ANZ chief executive Shayne Elliott earlier this year said the acquisition of Suncorp would create a combined bank which was “better equipped to respond to competitive pressures.
“It will be for the benefit of Australian consumers and also deliver significant public benefits, particularly in Queensland,” Mr Elliott said.
“Queensland is thriving, with strong opportunities to further grow and prosper. We remain excited about the opportunities for ANZ and our customers in Queensland, and the benefits of bringing Suncorp Bank and its customers into the ANZ Group.”
The deal was seen as a win for investors because more than $4bn was expected to be distributed to Suncorp shareholders, including about $1bn to more than 158,000 so-called “mum and dad” shareholders who collectively hold in excess of 340 million shares.
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