Today I am announcing approval of the proposed acquisition by AMP Limited (AMP) of the Australian and New Zealand businesses of AXA Asia Pacific Holdings Limited (AXA AP), with appropriate conditions, under the Financial Sector (Shareholdings) Act 1998 (FSSA).
My decision follows a thorough assessment of the likely impact on the Australian national interest, particularly the need for a strong, stable and competitive financial system that provides families and small businesses with confidence and choice.
The combined strength of AMP and AXA AP, with a larger consolidated balance sheet and broader capital base, will allow the merged entity to compete vigorously with the major banks across both the Australian wealth management and banking sectors.
The Treasury advises that the merger will enable greater investment in AMP Bank, enhancing its ability to compete further in the mortgage market.
I am imposing strict conditions on the acquisition to ensure the best possible outcomes for affected AMP and AXA AP employees.
This decision takes careful account of the detailed assessments of the Australian Competition and Consumer Commission, the Australian Prudential Regulation Authority, the Australian Securities and Investments Commission and the Department of the Treasury.
I am advised that the proposed on-sale by AXA AP of its Asian assets to AXA SA does not require approval under the Foreign Acquisitions and Takeovers Act (1975) or the Government's foreign investment policy, principally because these Asian assets do not constitute an ‘Australian business' within the meaning of that Act. AXA SA is also not proposing to increase its current shareholding in AXA AP.
I consider, however, that the proposed acquisition would be in the Australian national interest within the terms of the FSSA, which applies the same high threshold for approval.
APRA has also advised that approvals are not required under the Insurance Acquisitions and Takeovers Act 1991 for the proposed transaction.
Approval of the proposed acquisition under the Financial Sector (Shareholdings) Act 1998 is conditional upon the agreement of the shareholders of AXA AP to the proposal and the endorsement of the relevant scheme of arrangement.
1 March 2011
The conditions to which this approval is subject are that as part of the implementation of the proposed merger, AMP Limited, as part of any reorganisation of the AMP Group's activities, is required to:
AMP Limited will not be liable for any failure to perform any obligations imposed by these conditions if the failure is due to Force Majeure.
If AMP Limited is by reason of Force Majeure unable to perform an obligation under these conditions, AMP Limited will soon as practicable and in any event within 30 days notify the Deputy Prime Minister and Treasurer specifying:
and will use all reasonable diligence and employ all reasonable means to remedy or abate the Force Majeure as expeditiously as possible.
Force Majeure means:
This approval remains in force indefinitely.