Westpac Group’s plans to divest its Pacific businesses has hit a regulatory roadblock with Papua New Guinea’s (PNG) competition watchdog raising concerns on the proposed deal.
In a draft determination, PNG’s Independent Consumer and Competition Commission (ICCC) indicated that it will reject the deal. It noted that the deal ‘would not result in public benefits that outweigh detriments to the public’.
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However, the regulator requested additional submissions from the stakeholders before it takes the final decision in September.
This determination is limited to PNG market.
In December last year, Westpac Group signed deal to sell its Pacific businesses to Kina Securities for up to $420m.
The divestment included Westpac Fiji and Westpac’s 89.91% stake in Westpac Bank PNG.
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By GlobalDataIn a statement, Westpac said: “Given Kina Bank’s commitment to financial inclusion and innovation, its proposal to retain all local staff and branches, and its intention to maintain two brands in PNG, Westpac believes that the transaction is in the interests of Westpac’s customers and staff and the people of Papua New Guinea and Fiji.”
The proposed divestment is part of Westpac Group’s plans to sell non-core businesses. The lender aims to focus on consumer, business and institutional banking in Australia and New Zealand.
At 30 September 2020, Westpac Pacific had net assets of $426.53m (A$580m).
Last month, Westpac abandoned its previously announced plans of a prospective demerger of its business in New Zealand.
