ANZ-Suncorp Merger Deal

Study Notes

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.

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.

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.

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.

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.