The competition watchdog says it won't oppose the proposed $18.2 billion takeover of St George Bank Ltd by Westpac Banking Corp.
The Australian Competition and Consumer Commission (ACCC) said a merger of the pair was unlikely to substantially lessen competition in the banking sector.
The ACCC concluded that while St George Bank is a relatively innovative and dynamic competitor with a strong focus on customer service, other competitors to the merged entity will continue to play a similar role.
"In particular, the ACCC considered that competition in retail banking markets provided by the other major banks and regional banks along with credit unions, building societies and niche players, would be sufficient to constrain the merged firm after the acquisition," ACCC chairman Graeme Samuel said.
"The ACCC acknowledges the role that regional banks have played in challenging the major banks, particularly as they have entered new states and competed aggressively to gain market share," he added.
The ACCC's determination follows a review of the proposed acquisition that included market inquiries of interested parties, confidential surveys by the ACCC and consideration of internal documents of proposed merger parties.
Westpac and St George said the ACCC decision was an important milestone in the merger process.
A scheme booklet detailing the proposal will be sent to St George shareholders by September 29.
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