The Australian Competition and Consumer Commission will not block Macquarie Group’s acquisition of dealer finance company Esanda.
In a statement yesterday the ACCC said it would not oppose the proposed purchase of Esanda from the ANZ bank.
Despite Esanda and Macquarie Group both financing motor vehicle dealers, the competition watchdog concluded that the purchase wasn’t likely to “substantially lessen competition” in the bailment and point-of-sale finance market.
“The ACCC had some concerns that the proposed acquisition may lead to increased bailment interest rates (or lower commissions to dealers on POS finance), particularly for dealerships that do not have access to an aligned or in-house finance provider,” said chairman Rod Sims.
“However, the ACCC concluded that on balance the combination of existing and potential competitive constraints would be sufficient to prevent a substantial lessening of competition as a result of the possible acquisition. The merged entity will face competition from Westpac/St George and manufacturer-aligned financiers as well as the possibility of new entry, and pressure from vehicle manufacturers (OEMs) to ensure that their dealers’ finance offers remain competitive with those of other dealers.”
Considering that a number of manufacturers in Australia had their own finance arms, including VW, Nissan, Toyota, BMW and Mercedes, it said that the proportion of dealerships without access to an aligned financier was small.
“The ACCC also noted that if the merged entity were to increase bailment rates and/or decrease POS commissions, this would provide an incentive for other providers, including manufacturer aligned financiers such as Toyota Finance and Nissan Finance, to begin to compete for the business of unaffiliated dealerships,” said Sims.
The nature of the car business meant that Macquarie may face indirect competitive constraints, it said.
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