Aussie Home Loans - proposed acquisition of Wizard Home Loans Pty Ltd
Type of assessment
Informal Review
Reference
36059
Acquirer(s)
Aussie Home Loans
Target(s)
Wizard Home Loans Pty Ltd
Industry
Banking/Home Loans
Summary
The sale of Wizard's Home Loan business comprises two transactions:
1. The proposed acquisition of the Wizard mortgage distribution business by AHL Investments Pty Ltd (Aussie Home Loans).
2. The proposed acquisition of a portion of the GE loan book by the Commonwealth Bank of Australia - comprising up to $4 billion of Wizard home loan receivables.
Outcome of assessment
Not opposed
Total review days *
21
Commenced public review
27th January 2009
Date completed
24th February 2009
Market definition
The ACCC considered both transactions in the context of the national market for the supply of home loans.
Competition analysis
The ACCC concluded that the first transaction, the proposed acquisition of Wizard's mortgage distribution business, was unlikely to result in a substantial lessening of competition for the following reasons:
- the proposed acquisition would not result in a significant aggregation of market concentration and therefore it was unlikely that Aussie Home Loans would gain any market power in the supply of home loans;
- there are sufficient alternative suppliers of home loan services which would be likely to continue to competitively constrain Aussie Home Loans; and
- barriers to entry in the mortgage broking sector are sufficiently low so as not to significantly impede new entrants or existing competitors from expanding.
The ACCC considered that the second transaction, the proposed acquisition of a portion of GE's loan book by the Commonwealth Bank of Australia, would not lead to a significant change in market concentration and was unlikely to result in a substantial lessening of competition.
Review timeline
Date
Event
27th January 2009
ACCC commenced review under the Merger Review Process Guidelines.
6th February 2009
Closing date for submissions from interested parties.
24th February 2009
ACCC announced it would not oppose the proposed acquisition.
* Total Review days = Total business days less public holidays and time during which the review was suspended.
