Australia's NAB terminates 12.4 billion dollar AXA bid
National Australia Bank on Tuesday said it had terminated its 13.3 billion dollar (12.4 billion US) bid for AXA Asia Pacific after the competition watchdog said it would block the move.
The announcement, which follows the Australian Competition and Consumer Commission's decision to oppose NAB's acquisition of AXA's Australian and New Zealand businesses, opens the way for rival suitor AMP to reenter the picture.
NAB, Australia's fourth largest bank, said it remained committed to participating in the wealth management industry, which it said was "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," group chief executive Cameron Clyne said in a statement.
Under the proposed arrangement, French parent company AXA SA would have taken charge of its subsidiary's Asian arm, while NAB would have controlled the Australian and New Zealand businesses.
AXA Asia Pacific Chairman Rick Allert noted the development.
"The directors remain very confident about the future and we look forward to continuing to deliver shareholder value," Allert said in a statement.
The deal would have been the largest ever takeover in Australia's financial services sector, and would have made NAB one of Australia and New Zealand's leading wealth management groups.
But NAB's AXA offer was rejected by competition officials for a second time last week over fears it would shrink the local financial services industry, while analysts had expected the bank to walk away from the deal.
The ACCC argued that AXA was emerging as a vigorous and effective competitor and said NAB's suggestion of divesting key technology, which it had proposed after being knocked back in April, had failed to ease competition fears.
The watchdog had raised particular concerns about the supply of retail investment platforms -- Internet portals linking retail investors with the diverse investment products offered by fund management companies.
NAB had undertaken to sell AXA Asia Pacific's North wealth.net platform to IOOF Holdings Ltd but the ACCC said this would not have safeguarded competition in the highly concentrated market in which NAB is a key player.
AMP, which made an initial 11.5 billion US dollar bid for the businesses last year, said it was considering its options following the latest development.
The company continued to view AXA Asia Pacific's Australian and New Zealand operations as "strategically attractive" on the right terms, a spokeswoman for AMP told Dow Jones Newswires.
The ACCC has previously said it does not have the same competition concerns about an AMP buy-out.
Analysts said it was unlikely that NAB would bid for other wealth management assets, given the ACCC's current stance.
"We think other (merger and acquisition) opportunities for NAB are limited and a back-to-basics domestic banking strategy will likely ensue," RBS analysts said last week.
"NAB's strategy in wealth management should by no means be changed by missing out on the AXA assets," it added.
© 2010 AFP