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Top News Stories: 17 June 2024

Written by BusinessCorp | Jun 16, 2024 4:18:15 PM

Today, we delve into a series of impactful business stories that are shaping Australia's economic and corporate landscape. From major mergers in the banking sector to strategic shifts in the fast-food industry, here's a comprehensive look at today's top news.

Federal Treasurer's Decision Crucial for ANZ's $4.9 Billion Suncorp Takeover

Job Security Concerns

ANZ's $4.9 billion acquisition of Suncorp’s banking division is one step away from completion following Queensland's parliamentary approval. Federal Treasurer Jim Chalmers now holds the final say. The Financial Sector Union, concerned about reduced competition, is pushing for job security for ANZ members, similar to the three-year commitment given to Suncorp staff.

Long Road to Approval

Initiated nearly two years ago, the acquisition faced initial blocks by the competition watchdog, which were overturned on appeal. Chalmers is assessing the deal's national interest, with the decision expected soon.

Growth in Mortgage Market

ANZ aims to boost its mortgage market share, currently over 13%, by integrating Suncorp’s 2% share, potentially surpassing National Australia Bank as the third-largest lender.

Queensland's Support

Queensland Treasurer Cameron Dick endorsed the merger, citing benefits including skilled financial jobs and $35 billion in green energy project funding. New banking regulations for greater transparency and improved competition have also been introduced.

Domino's Recruits Burger King Veterans to Boost French Market

Key Appointments

Domino's Pizza Enterprises has recruited former Burger King France executives Jerome Tafani and Guy Billiard to revamp its French operations. Under Tafani, Burger King grew from 42 stores to over 500, with sales of €1.7 billion last year.

Current Challenges

Domino’s shares are down from nearly $60 to $37.45. In France, Domino’s holds just 8% of the market, with online sales lagging behind other European countries.

Recent Changes and Analyst Insights

Joel Tissier was appointed CEO of Domino’s France to strengthen franchisee support. Analysts project improved sales through product innovation but warn of slower store growth.

Cbus Faces Complaints Over Customer Service

Cbus recorded the highest rate of customer complaints among major super funds, with 3.49 per 10,000 members, double the national average. Issues mainly related to account administration, leading to $1 million in compensation payouts.

Increased Scrutiny

Financial Services Minister Stephen Jones has threatened further regulation if improvements aren't made, as customer service becomes a priority for enforcement.

Historical Context

Cbus, managing $85 billion, has faced more complaints than other funds, but ongoing improvements have been noted. Super Consumers Australia anticipates a spike in complaints as more baby boomers retire.

Aware Super Targets Payday with ProTen Sale

Strategic Moves

Leading super fund Aware Super is reviewing ProTen's capital structure with Macquarie Capital, signalling a potential sale. ProTen, valued between $500 million and $1 billion, is a major asset in Aware's infrastructure portfolio.

Historical Context and Financial Growth

ProTen has grown significantly under Aware and Roc Partners, now holding 19% of Australia's poultry market. It generated $131.2 million in revenue and $19 million in profit last fiscal year.

Roc Partners' Broader Strategy

Roc Partners recently acquired Pace Farms, enhancing their agribusiness portfolio. ProTen’s sale could signify major shifts in Australia's agribusiness sector.

Gippsland Jersey Milk Pulled from Coles Stores Over Profit Dispute

Small Producer vs. Supermarket Giant

Independent milk producer Gippsland Jersey will be significantly reduced in Coles stores due to profit margin disputes. Co-founder Sallie Jones states the company cannot sustain Coles' profit demands.

Impact on Gippsland Jersey

The producer faces a two-week deadline to find new outlets for its milk. Jones fears further retaliation from Coles, highlighting the challenges faced by small producers.

Market Dynamics

Lactalis, Saputo, and Bega Cheese dominate Australia's milk market, with private labels now making up over 55% of sales.

Response and Future Concerns

Jones urges consumer support for local brands. Coles states the product range review is based on customer demand.

PEXA Faces Local Regulatory Hurdles Amid UK Expansion Hopes

PEXA, expanding into the UK, faces local regulatory challenges that threaten its Australian dominance. NSW legislation aims to open PEXA’s e-conveyancing systems to competitors, but progress is slow.

Political and Regulatory Battle

Federal and state ministers have met with no updates. Criticism from Assistant Competition Minister Andrew Leigh highlights potential savings for Australians through competition.

Claims and Counterclaims

Sympli CEO Philip Joyce accuses PEXA of delaying reforms, while PEXA argues that integration could add customer friction.

Optimism in the Sharemarket

PEXA remains focused on its UK prospects despite local uncertainties. Investors are optimistic about its international opportunities.

Labor Takes a Hit in Polls Amid Cost of Living Concerns

Key Poll Findings

Recent polls show voter dissatisfaction with Labor, narrowing the gap between Prime Minister Anthony Albanese and Opposition Leader Peter Dutton. Dutton now has a higher approval rating than Albanese.

Economic and Climate Policies

Labor's recent budget has not swayed voter sentiment enough, with the Coalition gaining traction by linking Labor’s climate policies to financial stress.

Voter Concerns

Top voter concerns include cost of living, housing, and economic management, with climate change being a lower priority.

Potential Election Impact

If trends persist, Labor might face a minority government situation. Dutton warns of a potential recession due to Labor's policies.

Treasurer Signals Possible Approval for ANZ's $4.9 Billion Suncorp Deal

Treasurer Jim Chalmers may approve ANZ's acquisition of Suncorp's banking division. Despite an initial block by the ACCC, local support is strong, and regulatory demands favour larger banks.

High Technology Costs and Regulatory Pressures

Smaller regional banks struggle under regulatory pressures, favouring larger institutions like ANZ. Chalmers' decision could redefine Australia's banking sector.

Sleeping Duck Founders Win Legal Battle Against Investor

Supreme Court Decision

Sleeping Duck founders Selvam Sinnappan and Winston Wijeyeratne won a lawsuit from investor Dr Adir Shiffman. The court dismissed claims of exclusion from key decisions, ordering Shiffman to pay legal costs.

Company Valuation

Once valued at $400 million, a recent valuation placed it at $45.3 million. Shiffman, who still holds a significant stake, expressed disappointment and is considering his options.

NSW Government to Allocate $450 Million for Essential Worker Housing

Affordable Housing Project

The NSW Minns government will invest $450 million to build over 400 discounted rental homes for essential workers. Rental discounts of around 20% are expected.

Site Acquisition and Partnerships

Landcom will acquire sites in high-affordability issue areas, with potential private partnerships to expand the project.

Support from Essential Workers

Paramedics and other essential workers have welcomed the initiative, seeing it as a means to improve their quality of life. The eligibility criteria are still under discussion.