The current law requires Supreme Court intervention to rectify breaches. The new deal will include “staged mechanisms” to remedy breaches, which one source with knowledge of discussions said might entail financial penalties.
Melbourne-headquartered ANZ wants to buy Brisbane-based Suncorp’s bank for $4.9 billion. The deal needs approval from the Australian Competition and Consumer Commission and the federal government.
A third hurdle was convincing the state to change a rare law binding Suncorp’s bank to Queensland, which flowed upwards to the head entity. The law comes from Suncorp’s creation from private and public companies in 1996. Among changes unveiled on Friday included the proposed law amendments, including the headquartering requirements, would instead apply to Suncorp’s head company and its remaining insurance arm.
It frees ANZ from any legislative bind against the banking division being acquired.
Mr Dick told AFR Weekend he was “clear that the only way the head office requirement would be removed, would be if it was replaced with another”.
“This deal wasn’t getting done without it. But Suncorp is clearly committed to Queensland, and ultimately was happy to agree,” he said.
The current law retains clauses such as the “principal operational offices” for areas including “account processing” be based in Queensland.
But bureaucrats in 2012 identified applying these laws as “problematic”, such as with insurance “policies” not being “accounts”, according to right to information documents.
Former Suncorp managing director Patrick Snowball also attracted headlines, labelling himself a “Sydneysider” while in the top job in 2010, although the company was insisting his principal residence was in Brisbane.
Suncorp now has a heavy NSW presence: seven of its 11 senior executives list themselves on LinkedIn as based in Sydney.
Suncorp on Friday also committed to ensuring aggregate employment levels for its insurance division and group corporate service activities were greater in Queensland than any other state. It would also create a Townsville hub with 120 staff and a disaster response centre in Brisbane.
ANZ also committed to a Brisbane technology hub with 700 people over five years. A source with knowledge of the commitment said a contractual agreement between the government and ANZ existed, potentially resulting in damages for breaches.
This hub was on top of ANZ’s earlier commitments to offer $35 billion in Queensland financing opportunities over 10 years, which industry figures have dismissed as “pie in the sky”.
“The implementation agreement represents a significant commitment by ANZ to Queensland, and we welcome the constructive approach of the government to growing the tech sector in the state,” said ANZ chief executive Shayne Elliott.
Hunter Green analyst Mark Tomlins said legally binding Suncorp to Queensland would embed a small discount into the stock in any takeover activity. Any problems with recruiting people to Queensland would be slight, and mimic a larger issue with Australia bringing in experienced overseas executives, he said.
He also said Queensland retained a pool of talent, with smaller insurers including Youi and Budget Direct based there, while Queensland’s lifestyle also could be an attraction.