ACCC delays decision on AFG-Connective merger

The competition watchdog was initially scheduled to hand down its decision on 7 May but has now revealed that the provisional date for the announcement of its findings has been delayed.

This is the second time a decision on the merger has been postponed, after the ACCC released a statement of issues in February, in which it raised preliminary concerns about the transaction.

The ACCC said it was concerned the proposed merger would reduce competition in the supply of mortgage aggregation services to brokers and increase the risk of the merged entity “foreclosing rival lenders” by denying access to its lender panel in order to grow its own white label products.

Both AFG and Connective have sought to allay the ACCC’s concerns by demonstrating the transaction’s competitive utility.

However, according to an AFG spokesperson, this latest decision to postpone the merger was at the request of AFG, which has asked for more time to argue its case.

AFG told The Adviser that it is currently prioritising support for its broker network amid the ongoing COVID-19 crisis.

“We are still working through the ACCC process and have requested some additional time to provide more information to the ACCC given the current demands on our business from the COVID-19 situation,” a spokesperson said.

“We are heavily focused on delivering information and support to our broker network and customers at the moment.”

The ACCC is set to announce a new proposed decision date “in due course”.

If the transaction is approved, Connective will receive $60 million in cash and 30,886,441 AFG shares.

This values the acquisition at $120 million. 

[Related: AFG seeks to allay ACCC concerns]