egolinews.com

The ACCC has blocked National Australia Bank Limited’s (NAB) proposed acquisition of AXA Asia Pacific Holdings Limited (AXA) while clearing AMP Limited’s (AMP) proposed acquisition. As expected the key issue from the ACCC point of view was the excessive concentration in retail investment platform. 

The ACCC found that a merger between NAB and AXA would result in a substantial lessening of competition in the market for retail investment platforms for investors with complex investment needs.

However, the ACCC found that an independent AXA or a merger between AMP and AXA would not have this effect.

NAB is a significant competitor in the provision of retail investment platforms for investors with complex needs.

The ACCC also found that AXA is on the cusp of delivering a platform that is likely to provide aggressive competition for investors with complex investment requirements. As a result, the ACCC considered that a merger of NAB and AXA would remove competitive tension. By contrast, AMP is not a significant competitor in this area.

In December, NAB had proposed to acquire AXA AP’s Australian and New Zealand businesses on terms that valued the Australian and New Zealand businesses at $4.6 billion. In March, NAB agreed binding terms with the French parent company, AXA SA, and AXA AP.

AXA AP’s independent directors recommended that shareholders accept NAB’s proposal.

By contrast, AMP’s bid, which has not received independent director support, represented an ungeared value of around $4.4 billion for AXA AP’s Australian and New Zealand business. The offer consists 0.6896 AMP shares and a fixed cash component of $1.92 per share.

NAB can enter into further discussions with the ACCC about the Proposal. Under the terms of the executed transaction agreements, if NAB is not able to reach a satisfactory conclusion with the ACCC within six weeks, each of AXA APH, AXA SA or NAB can terminate the agreements between them in relation to the proposal.

At the close of trade yesterday, NAB shares were trading at $28.08, AXA APH shares were trading at $6.34 and AMP shares were trading at $6.40.

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