This article is from the Australian Property Journal archive
AUSTRALIA’S competition watchdog the ACCC will not oppose ASX-listed mortgage aggregator Australian Finance Group’s proposed acquisition of competitor Connective Group.
The proposed acquisition will create the largest mortgage aggregator in Australia.
Chair Rod Sims said the ACCC considered the acquisition’s potential impact on lenders, mortgage brokers and consumers and its initial inquiries identified a number of preliminary concerns.
“We have now completed a second round of inquiries. After our extensive public review of the acquisition and our consultation with a wide range of interested parties, we believe the combined AFG-Connective is likely to continue to face robust competition,” he added.
“While the ACCC found that AFG and Connective compete closely with one another, other established aggregators, including Finsure and the aggregators owned by the National Australia Bank, are likely to continue to provide strong competition.
“Mortgage brokers will still have a range of other aggregators, should they become dissatisfied with the combined AFG-Connective’s pricing or service. Lenders will likewise have a range of aggregators through which they can access potential consumers,” Sims said.
The ACCC found the combined AFG-Connective is likely to have the incentive to retain lenders on their panel who are popular with consumers. More generally, aggregators have an incentive to maintain a broad and diverse panel of lenders to attract brokers.
“Ultimately we found that a substantial lessening of competition was not likely.” Sims said.
AFG welcomed the decision. CEO David Bailey said this is good news for competition in Australia’s home loan sector.
“In response to the digital disruption and other challenges facing the sector, our merged businesses will be better positioned to invest in digital technologies and innovation.
“The transaction reinforces the combined group’s ability to continue to offer consumers a broad range of home loan products at competitive interest rates, provides a sustainable channel for non-major lenders and helps ensure comprehensive compliance systems are embedded within the merged AFG-Connective businesses.” Bailey said.
It is AFG’s intention that both the AFG and Connective brands will continue to operate concurrently following completion of the proposed transaction.
