NATIONAL Australia Bank (NAB) scrapped its £7.95bn (A$13.3bn) bid for Axa Asia Pacific Holdings yesterday, which would have seen it buy the Australian and New Zealand branches of the wealth management firm.
The move came after the Australian Competition and Consumer Commission blocked the deal for a second time last week.
“Continuing with this agreement is not in the best interests of shareholders,” National Australia Bank chief executive, Cameron Clyne said in a statement.
But National Australia Bank “remains very committed to participating in the wealth-management industry, which is an important part of the bank’s future,” he added.
Clyne’s decision not to challenge the verdict, or even seek a compromise, puts National Australia Bank’s rival bidder AMP, Australia’s second-largest asset manager, in a position to revive its offer of A$12.9bn. The offer was initially rejected ten months ago by Axa.
AMP said it was “considering its position” as a result of National Australia Bank pulling out of the deal. One thing in AMP’s favour is the fact that while its bid was rejected by Axa Asia, a tie-up has already been cleared by the regulator.
Axa Asia Pacific, a wealth manager with A$78.4bn of assets, “remains strategically attractive,” said AMP spokesman Jane Anderson.
The deal’s failure is likely to be met with relief by some of National Australia Bank’s investors, who thought that the deal was overpriced.