The Australian Competition Tribunal has given the green light to ANZ Group Holding’s (AU:ANZ) AU$4.9 billion merger with rival Suncorp Group’s (AU:SUN) banking division. The Tribunal dismissed earlier objections against the deal set forth by the Australian Competition and Consumer Commission (ACCC), citing its monopolistic nature. The two banks sought a review from the Tribunal following the ACCC’s rejection last August.
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ANZ shares were down 2.2% following the news, while SUN shares jumped over 6% to hit an all-time high of AU$15.56 today.
Further Details of the Approval and the Deal
The Tribunal believes that the benefits from the deal outweigh the possibility of reduced competition. The Tribunal “is satisfied that the forecast integration and productive efficiencies from the Proposed Acquisition constitute real and tangible benefits to the public.”
ANZ announced the acquisition in July 2022, aiming to boost its retail and commercial business. Meanwhile, for Suncorp, the sale of its banking unit will help it focus on its general insurance business and avoid the regulatory requirements of owning a banking unit. ANZ is one of Australia’s four largest banks, while Suncorp boasts to be the biggest general insurance company in the nation.
The deal was seen as a potential threat to the competition in the sector, especially the home loan market. Upon review, the ACCC found the merger to be monopolistic and suggested other merger options to Suncorp. The merger still requires the approval of the Federal Treasurer and the Queensland state.
What is the Price Target for ANZ Stock?
With five Buys versus five Hold ratings, ANZ stock has a Moderate Buy consensus rating on TipRanks. The ANZ Group Holdings share price target of AU$27.09 implies 2.6% downside potential from current levels.
