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The merger of two major credit reporting services has completed, after the ACCC green-lit the move in August.
Consumer credit reporting service Experian Australia Credit Services Pty Ltd has confirmed it has completed an $820 million acquisition of Credit Data Solutions Pty Ltd (illion) in Australia and New Zealand.
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The acquisition sees two of the three consumer credit bureaus merge, with Experian planning to integrate illion’s 500-strong team, as well as data, software, and intellectual property.
The new entity will operate under the leadership of current Experian A/NZ CEO Andrew Black.
Commenting on the acquisition, Black said Experian’s five-year strategic plan will unlock the value of the combined team and capabilities.
“illion has built an impressive product portfolio, data assets and customer base that are diverse and complementary to Experian’s strengths and we have a robust integration plan that will enable our customers to quickly realise the benefits of the combined entities,” Black said.
“One of the big wins here is the combined data assets which will provide more choice for our customers. This is going to supercharge our product and service capabilities, in alignment with Experian’s global strategy, in a way that simply hasn’t been possible before.”
Black also said the rebrand was likely to take place within the next 12 months, adding illion product names with credit market awareness were likely to continue.
“The integration will foster a culture of collaboration, bringing together our best talent to create a unified, empowered and high-performing team,” Black said.
In August, the Australian Competition and Consumer Commission (ACCC) green-lit the acquisition, despite the fact that it would see two of the three main credit reporting bodies in Australia merge.
At the time, ACCC commissioner Liza Carver said the merged entity would be unlikely to interfere with the current competitive dynamics between the services and Equifax, which is considered the “market leader”.
“While the proposed merger is between two of the three consumer credit bureaus, our investigations indicate that Experian and illion provide only a weak competitive constraint against the market leader Equifax and this is unlikely to change if the merger does not go ahead,” Carver said at the time.
“This lack of competitive constraint is a result of factors particular to consumer credit reporting and to the entrenched position of Equifax.”
Moreover, the ACCC found that the majority of credit providers use a single credit bureau and most often that bureau is Equifax.
The ACCC also found that, even where the large credit providers contract with multiple bureaus, most see Equifax as the primary bureau and utilise Experian and illion as a secondary data sources.
“There are strong network effects in this industry, as customers tend to direct more inquiries to their primary bureau, which in turn allows the bureau to obtain more inquiry data, allowing the bureau to further cement its position in the market,” Carver said.
Experian also confirmed the completion of the acquisition will see current illion CEO John Banfield step down from his position.
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