Photo Credit: Papua New Guinea Today
The Independent Consumer and Competition Commission is debating whether or not to accept Kina Bank's bid to buy Westpac's share in Westpac Bank PNG Limited.
Commissioner Paulus Ain of the ICCC has also issued a draft determination on Kina Securities Limited's Authorisation Application for the planned acquisition of 89.91 per cent of Westpac Bank-PNG-Limited ($420 million).
The ICCC intends to deny approval for the proposed purchase following public discussions, which included opinions from key parties and market data.
“For the reasons outlined in its draft determination, the ICCC is not satisfied that this proposed acquisition would not have, and would not be likely to have, the effect of substantially lessening of competition in the relevant markets; and is not satisfied that the proposed acquisition will result, or will be likely to result, in such a benefit to the public that it should be authorised,” Ain said.
“Therefore, the ICCC proposes to decline authorisation to KSL.”
However, the ICCC has scheduled a meeting on August 11, 2021, for the parties and other stakeholders to comment on the draft finding before the ICCC makes a final conclusion on the proposed purchase.
Kina Securities Limited has also verified receiving a copy of the ICCC's draft determination.
In response to the draft finding, the bank stated that it remains committed to the acquisition because it thinks it would strengthen competition in the relevant markets and provide a number of significant public benefits.
Westpac has also stated that it is working with Kina to evaluate the ICCC's draft determination.
Both are expected to submit additional comments to the ICCC before the commission's final judgment is published in September, following the public consultation period that begins next month.
“Given Kina Bank’s commitment to financial inclusion and innovation, its proposal to retain all local staff and branches, and its intention to maintain two brands in PNG, Westpac believes that the transaction is in the interests of Westpac’s customers and staff and the people of Papua New Guinea and Fiji,” the bank said in a statement.
In December 2020, Westpac announced its plan to sell its Pacific businesses in Fiji and Papua New Guinea to Kina Securities Limited.
Kina Securities applied to the ICCC in March seeking approval for its proposal to acquire 89.91 per cent of Westpac PNG's shares, and Kina shareholders approved the acquisition of Westpac's Pacific businesses in April. However, the sale is still pending regulatory approvals in both Fiji and Papua New Guinea.
Reference: Yafoi, Melisha. Post-Courier (28 July 2021). “ICCC Looks To Reject Westpac Acquisition”.
