What's happened?

On 20 February 2024, the Australian Competition Tribunal (Tribunal) set aside the determination by the ACCC dated 4 August 2023 in which it denied an application for merger authorisation of Australia and New Zealand Banking Group’s (ANZ) proposal to acquire 100% of the shares of SGBH Limited (which owns 100% of the shares of Suncorp Bank) from Suncorp Group Limited (Suncorp) (Proposed ANZ/Suncorp Bank Acquisition).

The Tribunal’s decision is significant because this is the first time where the Tribunal has overturned an ACCC merger authorisation determination under the current regime. Most recently, the Tribunal affirmed the ACCC’s determination dismissing the application for merger authorisation in respect of the proposed acquisition by Telstra Corporation Limited of TPG Telecom Limited on 21 June 2023.

As we previously noted, the ACCC’s decision attracted substantial interest because it was the first significant ACCC opposition to a merger in the banking sector since the National Australia Bank’s (NAB)/AXA decision in 2010 (under the informal clearance process), and particularly in the context of considering ACCC engagement strategies, and upcoming proposals for merger reform.


Please see our prior alert on this matter for background and context on the Proposed ANZ/Suncorp Bank Acquisition and the applications by ANZ and Suncorp to appeal to the Tribunal dated 24 August 2023.

The Tribunal's decision

The Tribunal’s decision and reasons will be published after the parties have provided submissions on proposed confidentiality redactions to the reasons.

In the meantime, what we know is that the Tribunal has set aside the ACCC’s determination (under section 102(1) of the Competition and Consumer Act 2010 (Cth) (the Act) and made a determination granting to ANZ unconditional merger authorisation for the Proposed ANZ/Suncorp Bank Acquisition (under sections 88(1) and 102(1) of the Act).

Based on the Tribunal’s review of the material before the ACCC and some limited new information, the Tribunal was satisfied that the conduct for which the authorisation was sought:

  1. would not have the effect, or would not be likely to have the effect, of substantially lessening competition (SLC) in any market; and
  2. while noting it was unnecessary to determine due to being satisfied of (1), would result, or be likely to result, in a benefit to the public and that benefit would outweigh the detriment to the public that would result, or be likely to result, from the conduct.

On public benefits, the Tribunal considered the forecast efficiencies claimed by ANZ and Suncorp Bank constitute real and tangible benefits and are likely to be sustained but noted that other public benefits claimed by ANZ and Suncorp Bank were either not public benefits or were not specific to the Proposed ANZ/Suncorp Bank Acquisition.

Relevant markets and counterfactuals

The Tribunal considered that the relevant markets were:

  1. the national market for home loans;
  2. the supply of small and medium (SME) banking services to customers in Queensland; and
  3. the supply of agribusiness banking products to customers in Queensland.

The Tribunal had regard to the two counterfactuals advanced by the ACCC and Bendigo as follows:

  1. Suncorp Bank continuing to operate under the ownership of Suncorp (the status quo, or No-Sale Counterfactual); or
  2. Suncorp Bank being acquired by or merging with another second-tier bank, specifically by or with Bendigo and Adelaide Bank (the Bendigo Merger Counterfactual).

The Tribunal concluded that the above counterfactuals are likely, although far from certain, noting that the Bendigo Merger Counterfactual may face commercial challenges and significant delays in making it commercially viable within a short time period.

Nevertheless, even though these counterfactuals were likely, because the Tribunal considered that the Proposed Transaction was not likely to SLC, these counterfactuals were not determinative.

Application of coordinated effects theory of harm

The Tribunal considered the critical issue was whether there would be a likely SLC in a relevant market, including through increasing the ability of the major banks to coordinate. A key aspect of the Tribunal’s decision to set aside the ACCC’s determination was based on the ACCC’s theory of “coordinated effects” in home loan competition. Ultimately, the Tribunal did not consider that the proposed acquisition would meaningfully impact on the likelihood of coordination.

The Tribunal acknowledged the ACCC’s concerns that if the Proposed ANZ/Suncorp Bank Acquisition proceeded, the market conditions (at least in the national home loans market) were conducive to an increased risk of tacit collusion and barriers to entry and expansion would remain. However, the Tribunal concluded that the conditions for coordination have recently reduced and are likely to reduce in the near future, including due to the emergence of Macquarie Bank as a maverick and the increasing use of brokers, which have had an impact on stimulating competition and greater consumer switching.

The Tribunal also concluded that the small increase in ANZ’s market share arising from the Proposed ANZ/Suncorp Bank Acquisition would not be likely to have a meaningful impact on the degree or likelihood of the major banks coordinating. It considered that Suncorp Bank was not a significant competitor in the national home loans market and would not increase the competitive constraint on major banks. 

The Tribunal was not satisfied that Suncorp Bank’s offering is likely to be more competitive in the No-Sale Counterfactual or Bendigo Merger Counterfactual, noting Suncorp has no plans to compete more rigorously or grow its agribusiness. In the Bendigo Merger Counterfactual, the addition of Bendigo’s market share would only lead to a modest increase in the merged entity’s share in the supply of SME banking services or the supply of agribusiness banking products to customers in Queensland.

The Tribunal was ultimately satisfied that the risks of coordination are outweighed by the fact that Suncorp and ANZ are not close competitors, and the merged entity would likely remain competitively constrained by competitors including Rabobank and Suncorp’s offering is not unique and can be replicated by other competitors.

Next steps and implications for the ACCC's proposed merger reforms

The Full Federal Court can review the Tribunal’s determination only on questions of law and it does not appear this is a likely pathway for the ACCC. 

ACCC Chair Gina Cass-Gottlieb stated in the ACCC’s media release regarding the Tribunal’s decision that the ACCC:

“notes the decision and will reflect on it. The Tribunal’s decision demonstrates the checks and balances of an administrative merger approval process… However, the Tribunal didn’t consider that the proposed acquisition would meaningfully impact on the likelihood of coordination.”

We expect the ACCC will point to this decision to support its submissions to the Treasury’s Competition Taskforce that the Tribunal does provide an effective check on the ACCC’s merger review process and that the SLC test should be expanded, including via amendments to section 50 of the Act to expressly state that SLC “includes entrenching, materially increasing or materially extending a position of substantial market power”. We reported on the Consultation Paper published by the Treasury’s Competition Taskforce dated 20 November 2023 here.