ACCC rejects NAB’s $13.3 billion bid for AXA

The Australian Competition and Consumer Commission has formally knocked back one of the biggest takeovers in Australian financial services history, ruling that National Australia Bank cannot buy financial services giant AXA Asia Pacific.

The competition watchdog’s final rejection of the deal comes almost five months after the ACCC first announced it would oppose the $13.3 million deal, arguing it would be likely to result in a “substantial lessening of competition in the relevant retail investment platform market”.

In order to appease the regulator, NAB then agreed to sell AXA’s North investment platform to IOOF Holdings Ltd.

But the ACCC said that after talking to financial planners, dealer groups, investment product providers, and others, it still could not allow the deal to proceed.

“The proposed undertakings offered by the parties do not provide sufficient certainty that the ACCC’s competition concerns will be addressed,” ACCC deputy chairman Peter Kell said in a statement.

Essentially, the ACCC was concerned that by selling the North investment platform to IOOF, competition levels would be maintained.

“The undertakings as proposed place a heavy reliance upon IOOF having sufficient distribution capability to provide an effective competitive constraint upon existing key players in the foreseeable future.”

“The proposed undertakings are also dependent on third parties to complete certain actions, and involve complex and long-term behavioural obligations that present risks.”

NAB said in a statement it is considering its response.

“NAB is considering the implications of this decision on its proposal to acquire the Australian and New Zealand businesses of AXA APH and will provide an update as soon as possible.”

The ACCC’s lengthy deliberations on the takeover have not been without drama.

ACCC chair Graeme Samuel was forced to excuse himself from the case following the near-collapse of retail giant DFO, in which he was shareholder. NAB was one of DFO’s main bankers.