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ACCC to review Westpac’s acquisition

After Westpac (ASX: WBC) confirmed on Friday that it would acquire Lloyds Banking Group’s remaining Australian businesses, car dealers have backed the Australian Competition and Consumer Commission’s (ACCC) plan to review the deal.

Westpac won the bidding war ahead of other corporations, including Macquarie Group (ASX: MQG), NAB (ASX: NAB), ANZ (ASX: ANZ) and Commonwealth Bank (ASX: CBA), as it sought to gain a greater share of the motor vehicle financing market.

The deal would give Westpac, along with its subsidiary St George Bank, a 30% share of the market for vehicle financing offered within car dealerships, as reported by The Australian Financial Review. As such, the review will focus on whether the acquisition will “substantially lessen” competition in the market, and how it will impact car buyers and dealers.

Westpac has remained confident however, that the deal will not reduce competition in the market in any significant way. The bank’s Chief Financial Officer, Philip Coffey, said “We feel very confident that when they do their work, that they will find our view that there is not a substantially lessening of the competition in any of the market segments.”

Westpac agreed to pay $1.45 billion for Lloyds’ businesses, which it funded via internal resources.

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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

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