ACCC to review Westpac's acquisition

The competition watchdog will need to determine the deal's effect on the market

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

Foolish takeaway

Although the acquisition provides a growth opportunity for Westpac, shares in the bank – like each of its major rivals – remain overpriced. Instead, are you interested in our #1 dividend-paying stock? Discover The Motley Fool's favourite income idea for 2013-2014 in our brand-new, FREE research report, including a full investment analysis! Simply click here for your FREE copy of "The Motley Fool's Top Dividend Stock for 2013-2014."

More reading                                                                                                                                        


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

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »