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NAB Optimistic Over AXA APH Acquisition
Steve Tucker, chief executive of MLC, the wealth management unit of Australian banking major National Australia Bank (NAB) says he is confident that the lenders $13.2 billion bid for AXA Asia Pacific Holdings (APH) will ultimately be successful, despite the fact that the ACCC on Friday deferred its ruling on the proposed deal.
“I think the ACCC is going through a very robust process, scoping views and opinions from far and wide. But we don’t believe there are any issues on fundamental competition grounds.” Mr. Tucker said.
The ACCC had previously said it would rule on the two rival bids by NAB and AMP for APH by March 17th. However on Friday it revealed that it was deferring its ruling, and would pass judgement on AMP’s $12 billion bid on April 1st and pushed back its NAB ruling to the 22nd of April.
AMP has made the argument to the regulator, that an NAB acquisition of AMP would stifle competition within the financial advisory business, but has said nothing about whether it planned to table a more generous bid.
The regulator in its initial summary has noted that NAB’s proposed acquisition of Axa APH raised a “higher level of concern than AMP’s”.
MLC’s Tucker says he accepts the need for the regulator to assess the implications of the acquisition, but sought to downplay any potential problems.
“There have been some concerns raised in regards to investment platforms and the share we will have and whether or not we will be in a position where we can exert influence on things like price. We don’t think that should be a concern at all. If you look at the platforms market, clearly is it is only one segment of a pretty diverse investment system. There are new entrants into the platforms market all the time.” Mr. Tucker said.
Mr. Tucker rejected the notion that NAB’s acquisition of APH would result in stifled competition, something that the regulator is very concerned about, voicing doubts that a deal may result in higher fees for the consumer.
“There are 18,000 financial planners out there, we might end up with 3000 or so aligned to us, hardly an overwhelming market share in terms of advice. The good news, thinking from a consumer point of view, is that we are the leading organisation when it comes to championing improvements in quality of advice, openness and transparency and being the first to move to the fee model and providing products that have been commission free since 2005.” Mr. Tucker said
The competition regulator is also assessing the probability that AMP itself may become a potential acquisition target if it fails to acquire APH, and whether it was possible that a merger between AMP and APH could yield a fifth pillar and new competitive force in Australian financial services, currently dominated by the Big Four lenders.
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