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Westpac sale of Pacific businesses stymied by ICCC

The major bank has said that it is committed to the sale of its Pacific businesses despite a competition regulator knocking back their proposed acquisition.

In December 2020, Westpac Group announced that it was to sell Westpac Fiji and the bank’s 89.91 per cent stake in Westpac Bank PNG Ltd to Kina Securities Ltd (whose subsidiary Kina Bank bought ANZ’s retail, commercial and SME banking business in 2019).

The Westpac deal was estimated to be around $420 million and is subject to regulatory approvals in both Fiji and Papua New Guinea (PNG).

However, the acquisition has been delayed after the PNG Independent Consumer and Competition Commission (ICCC) issued a draft determination stating it had competition concerns with the deal.

According to the competition watchdog, it is “not currently satisfied that the acquisition will not, or will not likely, have the effect of substantially lessening competition in the relevant markets identified”.

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The ICCC also determined that the acquisition would not result in public benefits that would outweigh detriments to the public.

Noting the move, Westpac said this week that it and Kina are both currently reviewing the draft determination and will make further submissions to the ICCC before the final determination is released in September.

“Given Kina Bank’s commitment to financial inclusion and innovation, its proposal to retain all local staff and branches, and its intention to maintain two brands in PNG, Westpac believes that the transaction is in the interests of Westpac’s customers and staff and the people of Papua New Guinea and Fiji,” a statement released by Westpac reads.

Kina has also suggested that it contests some of the statements and reasoning of the ICCC, adding it believes the acquisition will “actually improve competition in the markets” and “deliver a number of substantial public benefits”.

The company will participate and present at a conference in Port Moresby next month where it will outline the commercial and economic benefits of the acquisition, and to enable stakeholders to discuss and comment on the draft determination.

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Final comments and submissions on the draft determination close on 20 August.

[Related: ANZ finalises SME business sale in PNG]

 

Westpac sale of Pacific businesses stymied by ICCC
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Annie Kane

Annie Kane is the editor of The Adviser and Mortgage Business.

As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts. 

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