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SYDNEY: Australian regulators rejected National Australia Bank's US$12.2 billion bid for financial services firm AXA Asia Pacific on Thursday over concerns about competition in the industry.
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 divested itself of its specialised investment platform North, to IOOF Holdings Limited.
But the commission on Thursday 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 ACCC said the proposal relied heavily upon third parties completing "certain actions, and involve complex and long-term behavioural obligations that present risks".
Together, these factors "raised considerable uncertainty" about how effective the sale of North would be in countering any loss of competition as a result of NAB's takeover of AXA APH, the ACCC said.
Even without North, analysts have said NAB and AXA Asia Pacific's combined platforms account for more than 25 per cent of the market.
North is a wealth management technology linking financial planners and superannuation, pension or ordinary investors with more than 130 products, with initial capital and contributions guaranteed against market volatility.
Had the proposal gone ahead, it would have been the largest ever takeover in Australia's financial services sector, and would have seen NAB become one of Australia and New Zealand's leading wealth management groups. - AFP/fa
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