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AMP & NAB put in competing bids for acquiring AXA Asia Pacific Holding's new zealand assets

AMP’s proposed New Zealand acquisition now has to wait for an extra two weeks for the New Zealand Commerce Commission to decide over the company’s intended acquisition. AMP had proposed a takeover of AXA Asia Pacific Holding’s New Zealand assets. According to the regulator, it had postponed its decision over the acquisition till June 25th. The proposed acquisition of AXA APH was part of the company’s wider A$12.85 billion bid that was later overtaken by another bid by the National Australia Bank at A$13.29 billion offer.


Till now, AMP, the Sydney headquartered wealth manager is yet to announce whether it will submit a fresh, higher bid. The company’s clearance application that it had forwarded at the beginning of May, contemplated that the acquisition would not reduce competition due to a large number of independent players still in the market and the continued competitive threat from their expansion plans as they grow.


Additionally, Vertical integration would not be a challenge as the New Zealand funds management business for both AMP and AXA APH are already vertically integrated, i.e., they are both in the provision of wholesale and retail funds, AMP said in a report. The company further said that other numerous retail and wholesale fund managers currently compete in the market in addition to the two other vital retail wrap platform providers, which simply connotes an administrative structure for investments that offers a hub for a range of services like product menus, client details and reporting.


National Australia Bank’s endeavor to win approval for its proposed bid from the Australian competition regulator is still ongoing with talks centered on NAB and AXA APH’s wrap platforms, distribution business and advise networks. This presents yet another roadblock for AMP’s bid, whereas after four months of deliberation, the Australian Competition and Consumer Commission (ACCC) knocked back NAB’s bid due to concerns over the bank’s involvement in retail funds platforms via its ownership of MLC, Aviva and the JBWere wealth business.


ACCC chairman, Graeme Samuel, said allowing NAB and AXA to merge would weaken significantly the incentives to compete for retail investment platforms used by investors that have complex financial needs. Earlier this month, AXA APH and its Paris-based parent AXA extended an exclusivity agreement with NAB until July 15 to give the bank more time to negotiate with the ACCC. However, until the decision date, none of the parties can terminate the agreement because the bank failed to obtain competition clearance in Australia.


June 15, 2010.


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