ANZ-Suncorp Merger Deal

ANZ-Suncorp Merger

• Treasurer Jim Chalmers has approved the $4.9 billion deal for ANZ to acquire Suncorp's banking arm, the largest in Australian banking since 2008.
• The deal is subject to conditions, including no net job losses and no regional branch closures for three years.
• ANZ must also join Australia Post's banking service "Bank@Post" and make lending commitments worth billions of dollars for energy, infrastructure, and housing projects in Queensland.

Industry Concentration and Competition Policy

• The deal raises concerns about reduced competition in the banking sector, contradicting the government's stance on curbing industry concentration in other sectors.
• The government's approach to competition policy appears inconsistent, with mixed messages on mergers and industry dominance.
• The Australian Competition and Consumer Commission (ACCC) had denied authorization for the merger last year due to competition concerns.

Historical Context of Competition Policy

• The "trust-busting" movement in the US in the late 19th and early 20th centuries aimed to reduce monopolies and promote competition.
• The "Chicago Revolution" in the 1970s argued that mergers promote efficiency and that monopoly power is difficult to establish without government assistance.
• The Chicago school of thought has influenced Australia's approach to mergers, but there has been a counter-reaction in recent years, particularly after the global financial crisis.

Government Intervention and Market Power

• Governments are more likely to intervene when market power becomes politically sensitive.
• The ANZ-Suncorp merger may attract less attention due to banks being somewhat out of the spotlight since the banking royal commission.
• The government's tougher stance on supermarkets is likely due to their high market concentration and current political sensitivity.

Banking and Regional Branch Closures

• ANZ's requirement to join Australia Post's banking service is an attempt to address regional branch closures.
• Almost 800 branch services have closed in regional areas between 2017 and 2023 due to the shift towards online banking and reduced cash usage.
• Australia Post is being used to fill the gap left by bank closures, with a community service obligation.

Discover the details of the $4.9 billion deal between ANZ and Suncorp's banking arm, including conditions and commitments.