Australia Federal Treasurer Jim Chalmers approved ANZ’s $4.9 billion takeover of Suncorp’s banking division on Friday. The approval overturned the national consumer watchdog’s previous decision due to competition concerns. Introduced in 2022, the proposal sought to integrate Suncorp’s banking operations into ANZ’s portfolio, allowing Suncorp to focus on its insurance business.

Approving the acquisition, Chalmers put on ANZ strict and enforceable conditions. These conditions include maintaining current regional branch numbers nationwide and ensuring no net job losses attributable to the acquisition for three years. Additionally, efforts will continue to secure a commercial agreement with Australia Post for Bank@Post services. Chalmers emphasized that these conditions are “legally-binding and ensure Australians continue to have access to vital banking services, employees aren’t left behind, and Queensland and Australia benefit from the transaction.”

The Australian Competition & Consumer Commission (ACCC) declined to authorize ANZ’s acquisition on 4 August 2023, citing fears of increased dominance among the big four banks: Australia and New Zealand Banking Group (ANZ), Commonwealth Bank of Australia (CBA), Westpac, and National Australia Bank (NAB). The ACCC’s summary of reasons raised concerns that the merger could significantly reduce competition in national home loan markets, small to medium-sized business banking, and agricultural banking services in Queensland. Despite potential cost savings for ANZ and strategic benefits for Suncorp’s insurance arm, the ACCC concluded that these benefits were outweighed by the expected competitive detriments.

Following ANZ and Suncorp’s appeal to the Australian Competition Tribunal, the tribunal overturned the ACCC’s ruling and confirmed that the acquisition would not harm competition and could generate public benefits. In its decision, the tribunal deemed the ACCC’s concerns over bank coordination as “exaggerated” given current market conditions. Chalmers confirmed the approval of the acquisition, citing the tribunal’s decision as the demonstration of the checks and balances of an administrative merger approval process.

Chalmers also considered Suncorp being one of the few remaining combined bank and insurance companies in Australia, the proposal will allow Suncorp to focus on its insurance businesses at a time when the sector faces a range of specific challenges, including access and affordability.

ANZ and Suncorp welcomed Chalmers’ decision, with ANZ CEO Shayne Elliott stating, “Suncorp Bank customers will continue to receive the same great service, from the same exceptional Suncorp Bank staff. Over time, we’ll make available to them ANZ’s leading technology, giving them access to the very latest in banking services.”

The acquisition is set for completion by 31 July 2024.