Competition watchdog blocks ANZ $4.9 billion takeover of Suncorp

The competition watchdog has blocked a $4.9 billion bid by ANZ to take over Suncorp's banking arm.

For the merger to go ahead, the ACCC would have to be satisfied in all the circumstances that it would not be likely to substantially lessen competition, or that the likely public benefits would outweigh the likely public detriments.

"We are not satisfied that the acquisition is not likely to substantially lessen competition in the supply of home loans nationally, small to medium enterprise banking in Queensland, and agribusiness banking in Queensland," ACCC deputy chair Mick Keogh said.

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"These banking markets are critical for many homeowners and for Queensland businesses and farmers in particular.

"Competition being lessened in these markets will lead to customers getting a worse deal."

Keogh said that banks like Suncorp, outside the big four, were important competitors given the limited opportunities for new banks in Australia.

"Evidence we obtained strongly indicates that the major banks consider the second-tier banks to be a competitive threat," Keogh said.

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"The proposed acquisition of Suncorp Bank by ANZ would further entrench an oligopoly market structure that is concentrated, with the four major banks dominating.

"It also limits the options for second-tier banks to combine and strengthen in a way that would create a greater competitive threat to the major banks."

He said the acquisition of Suncorp would increase the likelihood of the major banks "coordinating" on home loans, to the disadvantage of customers.

In a statement, Treasurer Jim Chalmers said the government acknowledged the decision and would not comment any further.

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"As is the case with ACCC decisions like this, applicants and interested parties have the option to seek a review by applying to the Australian Competition Tribunal or to the Federal Court," he said.

ANZ CEO Shayne Elliott said he was disappointed with the decision.

"We are closely reviewing the determination and will seek an independent decision through the avenues of review available to us," he said.

"We believe the acquisition will improve competition, which will benefit Australian consumers, particularly in Queensland. All of the relevant markets are intensely competitive and will continue to be intensely competitive after the acquisition."

ANZ said it would continue preparations for the Suncorp takeover.

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