The ACCC should object to the proposed takeover by Westpac of the St George Bank on the grounds that it will reduce competition. My guess however is that Treasurer Swan will have already given indications that the merger be permitted.
There would be some cost-savings generated by the merger because branches could be closed and moderate network externalities realised. But these businesses are already large so that the gains in terms of having lower cost access to capital markets would be very modest.
The main effects will be however to reduce the very limited competition Australians have with respect to choice of banking service. The 'big four' banks offer lousy, expensive service and yet yield bloated profits to their shareholders on the basis of their preexisting market power. Service will be marginally worse not better should this takeover proceed because there will be still less competition.
Why can't the banks come up with innovative market ideas and improved service to extract better returns for their shareholders? Or are the only strategies open to the financial geniuses in the big four banks those involving takeovers of smaller Australian banks or dud investments overseas?