Australia regulator scraps National Australia Bank's AXA bid

ACCC cautious that merger could reduce competition in country's retail investment market.

Australia's competition regulator blocked National Australia Bank Ltd.'s US$12.3 billion plan to buy AXA SA's Asian-Pacific arm, raising the possibility of new bidding for the business and putting a spotlight on Australia's stance on financial-industry consolidation.

Under the complex deal, Australia's NAB was to purchase AXA's 54%-owned AXA Asia Pacific Holdings Ltd. and keep its Australian and New Zealand businesses, propelling it into a clear market-leading position in the life-insurance and wealth-management industries in those countries. French parent AXA SA would then buy back the Asian assets of the business, which targets Asia's growing demand for financial services.

Analysts had expected the regulator to approve NAB's bid, possibly with conditions such as asset sales. But the Australian Competition and Consumer Commission said Monday that NAB's acquisition of AXA Asia Pacific would substantially reduce competition in the retail investment market there.

Allowing NAB and AXA to merge would significantly diminish incentives to compete for retail investment platforms used by investors that have complex financial needs," the regulator said in a statement.

NAB said it would review the ACCC decision in detail before making any further comment. AXA Asia Pacific said if NAB can't reach an agreement with the ACCC within six weeks, then the deal can be terminated by any of the parties.

View the full story in the Wall Street Journal.