A.C.C.C. NOT TO OPPOSE MERGER BETWEEN SUNCORP METWAY AND
PROMINA
The Australian Competition and Consumer Commission will not intervene in the proposed
acquisition of Promina Group Ltd by Suncorp Metway Limited, ACCC Chairman,
Mr Graeme Samuel, said today.
"Market inquiries indicated that if the merged firm attempted to raise prices above
competitive levels, existing competitors including small to medium sized players would be
well placed to win customers from it. These existing competitors, and the threat of new
entry, are likely to act as a strong competitive constraint on the merged firm. As a result, the
ACCC does not consider that the acquisition will allow Suncorp to profitably raise premiums
or diminish its level of service".
"The ACCC considers that the proposed acquisition is unlikely to substantially lessen
competition in any of the markets for various lines of personal insurance, the market for
commercial insurance lines, or the markets for the other financial products and services
offered by Suncorp and Promina".
The ACCC investigation focussed on personal insurance lines, particularly CTP and motor
vehicle insurance in Queensland, and home insurance nationally, as well as on suppliers of
services to insurance companies, after it quickly became apparent that in the case of
commercial insurance lines and the other financial products offered by Suncorp, there are a
large number of other competitors who would be able to constrain the merged firm.
"The ACCC conducted a comprehensive investigation, including extensive discussions with
many industry participants", Mr Samuel said. "In relation to the main personal lines, the
ACCC formed the view that the merged firm will be constrained by existing and potential new
entrants since barriers to entry and expansion, such as brand loyalty, are not
insurmountable. In particular, a number of major banks have used their existing brands,
branch networks and customer relationships to expand their insurance distribution operations
and move into insurance manufacturing in recent years. They appear well placed to
strengthen their position in home and motor vehicle insurance, particularly if the larger
players attempt to increase prices".
The ACCC will be publishing a Public Competition Assessment in due course, which will be
available on the ACCC website, www.accc.gov.au, under Mergers.
Media inquiries
Mr Graeme Samuel, Chairman, (02) 6243 1131 or mobile/pager 0408 335 555
Ms Lin Enright, Director, Public Relations, (02) 6243 1108 or 0414 613 520
General inquiries
Infocentre: 1300 302 502
MR 315/06
20 December 2006
2
BACKGROUND
Suncorp and Promina both manufacture and distribute personal and commercial insurance
lines, as well as a range of other financial products and services such as life insurance,
superannuation, wealth management and trustee services. Suncorp also provides banking
services. The ACCC published a Statement of Issues on 6 December 2006, identifying a
number of lines of further inquiry that the ACCC wished to undertake, and inviting
submissions from market participants on the issues that had been raised.
Section 50 of the Trade Practices Act 1974 prohibits mergers and acquisitions that will have
the effect, or are likely to have the effect, of substantially lessening competition in a market.
Section 50(3) sets out a non-exclusive list of matters that must be taken into account in
determining whether an acquisition is likely to substantially lessen competition.
The ACCC conducted an informal merger assessment process in relation to the proposed
acquisition in accordance with its published guidelines. The ACCC's Merger review process
guidelines are available on the ACCC website, www.accc.gov.au.
- Forums
- ASX - By Stock
- PMN
- accc not to oppose merger..sky rocketing now
PMN
promina group limited
accc not to oppose merger..sky rocketing now
Featured News
Add PMN (ASX) to my watchlist
Currently unlisted public company.
The Watchlist
UNT
UNITH LTD
Idan Schmorak, CEO
Idan Schmorak
CEO
Previous Video
Next Video
SPONSORED BY The Market Online