The Australian Competition and Consumer Commission (ACCC) won’t oppose NAB's planned acquisition of neobank 86 400, finding it won't diminish market competition.
NAB first announced its intention to acquire 86 400 back in January for $220 million with plans to combine it with its own digital-first UBank.
NAB said the purchase will see 86 400‘s technology offerings be used to help fast-track UBank’s own development.
ACCC chair Rod Sims noted the role fintechs play in “challenging the established banks, leading to more innovative and cheaper banking for consumers”.
However, he said 86 400's products could be replicated and were readily available at many other business.
After consulting industry leaders and organisations, the ACCC found little concerns with the purchase.
“Supporting our decision is that we have seen several banks and non-bank lenders outside the big four invest heavily in their technology and service offering to improve user experience,” Sims said.
“Whilst in this instance we found that the removal of 86 400 is unlikely to substantially lessen competition in the market, we will continue to closely scrutinise proposed acquisitions of emerging competitors, particularly by major banks.”
86 400 CEO Robert Bell told iTnews the neobank is “really pleased with the outcome of the ACCC inquiry announced today.”
“We are confident that bringing 86 400 and UBank together will raise the bar for banking in Australia," Bell said.
“While there are still many steps to work through, the intention is to keep the UBank name but retain much of the look and feel of the 86 400 brand and deliver an exceptional customer experience by leveraging 86 400’s proprietary technology."
NAB’s own plans to fast-track UBank’s growth through the acquisition of 86 400 remain unchanged.
UBank CEO Philippa Watson welcomed the ACCC's decision, saying the planned acquisition will greatly benefit consumers through a market-leading digital experience under the combined business proposition.
“We are pleased with the ACCC’s decision and look forward to our continued engagement with regulators as we progress towards completion of the transaction,” Watson added.
Finalisation is expected by mid-2021 pending further regulatory approvals plus approval of the scheme by the Federal Court.
86 400 and UBank will continue to operate as separate businesses until the transaction is finalised.