Westpac easily clears ACCC hurdle

Westpac is one step closer to completing its merger with St George Bank after the Australian Competition and Consumer Commission issued a statement yesterday saying it would not oppose the merger as it was unlikely to substantially lessen competition.

The ACCC statement said: "While St George Bank is a relatively innovative and dynamic competitor with a strong focus on customer service, other competitors to the merged entity which remain in the market will continue to play a similar role."

When the commission released a statement of issues in July it raised only one concern about the proposed merger. It said it was uncertain about the impact on competition of the combination of the banks' wealth management platforms, BT Wrap and Asgard.

BT Wrap and Asgard are two of the three biggest wrap services in the wealth management market.

The ACCC said it had received mixed responses on the question of the degree of substitutability between master trusts and wraps. It said it would make further inquiries on this matter.

It was a question of how specialised the platforms are. The merged group would be dominant in the wrap account market but a number of other groups provided master trust services in the platform market.

The commission was interested in finding out how easily a financial planning group could take its business from a wrap to a master trust.

In its statement yesterday the ACCC said: "Further market inquiries have since revealed that there are a range of substitutable products, including master trust platforms and, increasingly, separately-managed accounts, available to financial planning businesses and investors."

The next milepost will be APRA and ministerial approval for the merger, which Westpac has said it expects by the end of this month. On September 1 Westpac plans to send a draft of the scheme booklet to the Australian Securities and Investments Commission.

If all goes to plan the scheme booklet will be mailed out to St George shareholders at the end of September and a St George extraordinary general meeting will be scheduled for November.

Westpac is banking on the court approval date for the merger to be November 7 and the implementation date November 21.