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NAB exits offer for AXA Asia business
Source: Agencies |
September 16, 2010, Thursday
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Print Edition
Print Edition
NATIONAL Australia Bank Ltd has pulled out of its bid to buy insurer AXA Asia Pacific Holdings Ltd after the Australian antitrust regulator blocked the US$12 billion deal for the second time since April.
NAB said in March that it would buy AXA Asia Pacific, retain the New Zealand and Australian businesses and sell the Asian firm back to the parent company, Paris based AXA. The bid was in direct competition with a rival offer from AMP Ltd.
But the Australian Competition and Consumer Commission has opposed NAB's deal on grounds it would slash competition in the retail investment platform market. The market is dominated by NAB, Westpac and Macquarie Group.
The share price of all three firms involved rose yesterday when trading resumed after the announcement. AXA Asia Pacific gained 0.4 percent to A$5.20, AMP rose 0.8 percent to A$5.12 and NAB jumped 1.8 percent to A$25.67.
"NAB's investors appear relieved that the deal won't go ahead and tie up NAB's time," said CommSec analyst Juliette Saly.
NAB had sought to sell AXA APH's North wealth.net platform to IOOF Holdings Ltd to appease the regulator, but the effort was not enough to convince it.
"Although we are disappointed with the decision of the ACCC, we have a strong position through MLC and NAB's other wealth management businesses," NAB group CEO Cameron Clyne said.
"NAB remains very committed to participating in the wealth management industry which is an important part of the bank's future. However, considering all the options, continuing with this agreement is not in the best interests of shareholders."
AXA said it is "fully committed to support the Australia and New Zealand businesses and will continue to review its options in the context of its growth strategy in Asia."
NAB said in March that it would buy AXA Asia Pacific, retain the New Zealand and Australian businesses and sell the Asian firm back to the parent company, Paris based AXA. The bid was in direct competition with a rival offer from AMP Ltd.
But the Australian Competition and Consumer Commission has opposed NAB's deal on grounds it would slash competition in the retail investment platform market. The market is dominated by NAB, Westpac and Macquarie Group.
The share price of all three firms involved rose yesterday when trading resumed after the announcement. AXA Asia Pacific gained 0.4 percent to A$5.20, AMP rose 0.8 percent to A$5.12 and NAB jumped 1.8 percent to A$25.67.
"NAB's investors appear relieved that the deal won't go ahead and tie up NAB's time," said CommSec analyst Juliette Saly.
NAB had sought to sell AXA APH's North wealth.net platform to IOOF Holdings Ltd to appease the regulator, but the effort was not enough to convince it.
"Although we are disappointed with the decision of the ACCC, we have a strong position through MLC and NAB's other wealth management businesses," NAB group CEO Cameron Clyne said.
"NAB remains very committed to participating in the wealth management industry which is an important part of the bank's future. However, considering all the options, continuing with this agreement is not in the best interests of shareholders."
AXA said it is "fully committed to support the Australia and New Zealand businesses and will continue to review its options in the context of its growth strategy in Asia."
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