On 19 September 2013, the ACCC announced that it would not oppose the proposed acquisition by Perpetual of The Trust Company. Perpetual and The Trust Company compete in the provision of a range of corporate and private trustee services. In clearing the transaction, the ACCC noted that the merger of Perpetual and The Trust Company would result in the merged entity being by far the largest provider of trust services – such as corporate trustee services and custodial services – in Australia. However, the ACCC also acknowledged the difficulty of measuring market shares in the industry, particularly given that positions between competitors varied considerably across different types of trust services, and identified the following constraints on the merged business:
- competition from existing trust corporations such as IOOF, AET, BNY Mellon and Equity Trustees Limited;
- the threat of entry by new competitors; and
- the countervailing power of corporate customers who could provide some in-house services or sponsor new entry if they were unhappy with prices or service levels.
To secure ACCC clearance, it was necessary for Perpetual to give a court enforceable undertaking to divest The Trust Company’s 13.4% shareholding in Equity Trustees. Perpetual’s undertaking alleviated any concern that the merged entity would be able unilaterally to raise fees for corporate trustee services.
Finally, the ACCC has approved IOOF as a purchaser of the 13.4% shareholding in Equity Trustees. IOOF’s subsidiary, Australian Executor Trustees Ltd, also provides corporate and private trustee services.