By Alice Uribe
SYDNEY–Bendigo and Adelaide Bank said it has the capacity to make an attractive bid for Suncorp Group’s banking unit, ahead of a hearing into whether Australia’s competition regulator was right to block ANZ Group’s bid to buy Suncorp’s bank.
Bendigo said there are “compelling incentives” for a merger between itself and Suncorp’s bank, according to its submission to the Australian Competition Tribunal, which is running the hearing.
“Bendigo has the capacity to make a compelling offer for Suncorp Bank at a value accretive to shareholders of both companies,” the Australian regional lender said in the submission dated Nov. 20, but made public Thursday.
“A merged Bendigo/Suncorp Bank would be a substantially stronger competitor against the major banks,” Bendigo said.
In August, the Australian Competition and Consumer Commission rejected ANZ’s proposed 4.9 billion Australian dollar (US$3.24 billion) acquisition of Suncorp’s bank, saying it wasn’t satisfied that the acquisition wouldn’t substantially reduce competition in Australia’s home-loan market.
The competition regulator also said an alternative merger between Bendigo and Suncorp’s bank would create a larger second-tier bank that would be better placed to “trigger a stronger competitive response from the major banks.”
ANZ then filed an application in August for the competition tribunal to review the regulator’s decision. It said at the time that it believed the combination of ANZ and Suncorp’s bank would create a bank better able to respond to competitive pressures, which would benefit consumers.
The competition regulator, in a submission published Thursday and dated Nov. 27, reiterated its view that it was justified in blocking ANZ’s bid on the grounds that it would increase concentration in the mortgage market.
Bendigo said in its submission there was a “commercially realistic likelihood of a merger” between Suncorp and Bendigo if ANZ’s bid didn’t go ahead. It added that there had been “serious and credible communications between the parties to advance such a merger.”
In new submissions to the competition tribunal published Friday, Suncorp and ANZ both rebutted arguments in favor of a potential Bendigo and Suncorp merger.
The tribunal hearing starts Monday, and is due to run for nine days. A decision on whether authorization for the ANZ-Suncorp merger should be allowed is expected in February.
Write to Alice Uribe at [email protected]
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