SYDNEY — Australian regulators rejected National Australia Bank’s $12.2 billion bid for financial firm AXA Asia Pacific on competition concerns yesterday, in a move welcomed by rival suitor AMP.
The Australian Competition and Consumer Commission (ACCC) said NAB’s suggestion of divesting key technology, after the takeover was initially rejected in April, had failed to ease competition fears. “The proposed undertakings offered by the parties do not provide sufficient certainty that the ACCC’s competition concerns will be addressed,” said ACCC Deputy Chairman Peter Kell.
AXA Asia Pacific’s French owner AXA SA and NAB agreed in March on the buyout, under which AXA SA would take its subsidiary’s Asian arm while NAB would control its Australian and New Zealand businesses.
The ACCC blocked the move but said it would reassess the situation if AXA Asia Pacific sold its specialised investment platform, North, to IOOF Holdings Limited.
But the commission yesterday said a “majority” of industry members it consulted remained concerned that the sell-off of North would “not provide for an effective competitive constraint”.
The deal would have been the largest ever takeover in Australia’s financial services sector, and would have made NAB one of Australia and New Zealand’s leading wealth management groups.
Rival bidder AMP called the ACCC decision a “great outcome for competition” and said it still regarded AXA, for which it offered $11.5 billion, as a lucrative investment.
“AMP has always said AXA remains strategically attractive, but at the right price,” an AMP spokeswoman said.
However, she said renewing AMP’s push for AXA was “a decision for another day” and there was no urgency in the matter. An exclusivity agreement preventing AXA from soliciting other bids expired yesterday, and the ACCC has already green-lighted AMP’s offer.
NAB, Australia’s fourth-largest bank, said it was “considering the implications of this decision” and would provide an update as soon as possible, a response echoed in a statement by AXA Asia Pacific.
Goldman Sachs said in a note to investors that “the most likely option is for NAB to walk away” from the bid, though it could challenge the decision in court or again seek to amend it. — AFP