CBA/BWA merger ok by ACCC
(12 December 2008 – Australia) The Australian Competition and Consumer Commission (ACCC) has given the green light for the go ahead of the merger between the Commonwealth Bank of Australia (CBA) and BankWest.
The ACCC will not oppose the proposed acquisition of BankWest and St Andrew's by the CBA, after concluding that the acquisition is unlikely to substantially lessen competition in the markets in which they compete.
The conclusion was announced by ACCC Chairman, Graeme Samuel, who said that, prior to the global finance crisis, BankWest had been a keen competitor in the marketplace, but this would not continue.
The ACCC received evidence that BankWest's expansion plans were to be significantly scaled back, as a result of the funding difficulties experienced by its UK parent company, HBOS.
The ACCC has formed the view that BankWest would be unlikely to continue to act as the aggressive competitor it was previously, Samuel said.
The ACCC also concluded that an alternative buyer was unlikely in the current funding environment, so a continued expansion strategy for BankWest would not occur in any situation.
Therefore, acquisition was unlikely to substantially lessen competition compared to the likely future state of competition if the acquisition did not proceed.
The decision by the ACCC, however, should not be viewed as a green light to the acquisition of other regional banks by the big four, Samuel concluded.
The conclusion was announced by ACCC Chairman, Graeme Samuel, who said that, prior to the global finance crisis, BankWest had been a keen competitor in the marketplace, but this would not continue.
The ACCC received evidence that BankWest's expansion plans were to be significantly scaled back, as a result of the funding difficulties experienced by its UK parent company, HBOS.
The ACCC has formed the view that BankWest would be unlikely to continue to act as the aggressive competitor it was previously, Samuel said.
The ACCC also concluded that an alternative buyer was unlikely in the current funding environment, so a continued expansion strategy for BankWest would not occur in any situation.
Therefore, acquisition was unlikely to substantially lessen competition compared to the likely future state of competition if the acquisition did not proceed.
The decision by the ACCC, however, should not be viewed as a green light to the acquisition of other regional banks by the big four, Samuel concluded.
Subscribe