ACCC won’t oppose IOOF, MLC deal

The ACCC has concluded its review commenced in October into the $1.4 billion acquisition, which could result in IOOF becoming Australia’s largest retail wealth manager.

The review indicated that post-acquisition, IOOF's advice business would still only have a market share of around 10 per cent post-acquisition and that the market would still remain highly fragmented.

The merged entity would still face competition from AMP, a similar-sized rival, as well as smaller firms.

IOOF would also be competing with and constrained by several other large firms, as well as smaller firms for the supply of retail platforms and it would cop significant competition from large industry super funds against its corporate platforms for super and other retirement income.

IOOF and MLC have both supplied wealth management solutions in the Australia market. They have competed in the supply of retail platforms for super and other retirement income, retail platforms for discretionary investments, corporate platforms for super and other retirement income, advice and investment management.

ACCC commissioner Stephen Ridgeway commented that transactions that combine two major firms in a sector will attract “close scrutiny” from the competition watchdog.

“However, feedback from consumers, financial advisers and other industry participants suggested that this deal would not be likely to substantially lessen competition,” Mr Ridgeway said.

“Despite the profile and size of this transaction, it does not raise concerns under section 50 of the Competition and Consumer Act largely due to the fragmented nature of most of the relevant markets and strong constraints from remaining competitors.”

IOOF has previously signalled it expects the deal to wrap-up before June.