Australia antitrust body approves NAB’s Citi acquisition
04:44, 25 November 2021
The Australian antitrust body has given its approval for National Australia Bank’s plan to acquire Citigroup’s consumer business for AUD1.2bn ($880m), viewing such a move would not hurt the industry’s competition.
The NAB first announced the plan in August, saying the acquisition will create the second-largest credit card provider in Australia. The buyout will also include a home lending portfolio, an unsecured lending business as well as white label partner brands, retail deposits business and private wealth management.
The Australian Competition and Consumer Commission (ACCC) said in a statement on Thursday that its review was focused on the credit card segment as “Citi is a substantial provider of credit cards and credit card services. Evidence showed that the proposed acquisition was unlikely to raise competition concerns in any other areas of overlap, given Citi’s minimal market share in these markets.”
No material changes to competition
ACCC Chair Rod Sims said: “Market feedback suggested that Citi is not unique with respect to its credit card offering, and many different credit card providers remain for consumers. NAB today is smaller in credit cards than its major bank rivals, and we don’t consider adding Citi’s card operations to NAB will materially change the level of competition.”
“We are very concerned to ensure that mergers in the financial industry do not limit the competitive constraint provided by providers outside of the major four banks, however, in this case, the ACCC did not consider there would be a substantial impact in any market,” Sims said.
In afternoon trade in Sydney, NAB’s stock exchanged hands at AUD28.28 apiece, 0.6% lower compared with Wednesday’s close.
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NAB welcomes ACCC decision
In a separate statement, NAB welcomed the competition watchdog’s decision and added that the proposed acquisition still requires approvals from the Australian Prudential Regulation Authority (APRA) and the Commonwealth Treasurer.
Should no further issues arise, the acquisition can be completed in the first half of 2022, NAB added.
Read more: NAB to buy Citigroup’s Australian consumer business for ARead more: NAB to buy Citigroup’s Australian consumer business for A$1.2bn.2bn