The Australian Competition and Consumer Commission (ACCC) has rejected NAB’s takeover of Axa Asia Pacific Holdings (Axa APH).

“The proposed undertakings offered by the parties do not provide sufficient certainty that the ACCC’s competition concerns will be addressed,” Deputy Chairman Peter Kell said.

The commission has focused on the impact the merger will have on the distribution of financial services products, especially through electronic investment platforms.

Last year NAB bought the Australian operations of Aviva to gain access to its successful Navigator platform.

Under the proposed acquisition, NAB would have gained control of Axa APH’s new North platform, regarded as being the next generation of distribution platforms.

However, to meet the ACCC merger concerns, NAB offered to sell the North platform to IOOF. But the ACCC says that move wouldn’t have helped free up market competition in the distribution of retail investment products.

“The undertakings as proposed place a heavy reliance upon IOOF having sufficient distribution capability to provide an effective competitive constraint upon existing key players in the foreseeable future,” Mr Kell said.

While rejecting NAB, the ACCC has raised no objections to AMP renewing its takeover bid for Axa APH.

“The ACCC formed the view that the AMP-proposed acquisition would be unlikely to result in a substantial lessening of competition in any market,” the commission said in its supporting documents for its decision.

While the regulator has focused on the distribution of investment products, a merger of NAB and Axa APH would not have given the bank a dominant position in Australia’s retail life insurance market.

According to Plan For Life’s life insurance survey for the March quarter this year – the latest figures available – a combined NAB/Axa market share would have been 26.5%, compared to AMP’s market share of 33%.

If AMP successfully buys Axa, its life insurance market share would be almost 40%, well ahead of NAB’s 21.1% market share.

Based on premium inflows, AMP would still be ahead with $12.8 billion for the March quarter compared to a combined NAB/Axa inflow of $10.3 billion.

Both Axa and NAB have said they will review the ACCC’s decision before taking any further action.