The ACCC has announced it will not oppose Australian Finance Group’s (AFG) proposed acquisition of Connective.
In making its decision, the ACCC considered the acquisition’s potential impact on lenders, mortgage brokers and consumers given that brokers play an important role in helping Australians find a mortgage, as well as allowing individual lenders to access a wider group of potential consumers.
“The proposed acquisition will create the largest mortgage aggregator in Australia. Our initial inquiries identified a number of preliminary concerns, as set out in our statement of issues in February,” ACCC Chair Rod Sims said.
“We have now completed a second round of inquiries. After our extensive public review of the acquisition and our consultation with a wide range of interested parties, we believe the combined AFG-Connective is likely to continue to face robust competition.”
While the ACCC found that AFG and Connective compete closely with one another, other established aggregators, including Finsure and the aggregators owned by the National Australia Bank, are likely to continue to provide strong competition.
“Mortgage brokers will still have a range of other aggregators, should they become dissatisfied with the combined AFG-Connective’s pricing or service. Lenders will likewise have a range of aggregators through which they can access potential consumers,” Sims said.
The combined AFG-Connective is likely to have the incentive to retain lenders on their panel who are popular with consumers. More generally, aggregators have an incentive to maintain a broad and diverse panel of lenders to attract brokers.
“Ultimately we found that a substantial lessening of competition was not likely,” Sims concluded.