NatMut/MLC Don’t Make It To The Altar
The proposed mega merger of National Mutual and MLC has fallen over with an inability to agree on an exit clause and differing management philosophies cited as the main reasons.
In what is becoming an era of financial institutions looking to achieve economies of scale through mergers this announcement is sure to cause some second guessing amongst other industry players looking at getting together.
The concept of two parties merging as equals is always going to be difficult to consummate successfully and history shows that whilst a number of mergers commence with this attitude you usually find that a more dominant ‘’equal’’ emerges and you eventually end up with a takeover.
Whilst the concept of the NatMut/MLC marriage had all the right ingredients, including potential savings of up to $200 million a year, the thought of one party losing effective management control was obviously too much to bear.
We would expect that NatMut and MLC will continue to look for new partners, but this time with the view of a takeover rather than a partnership.