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Experian has tried for some time to acquire Veda Advantage (Veda), the leading Australian Credit Bureau. Obviously it was not willing to pay the price the two owners of Veda are demanding. Experian paid a premium for Serasa, Brazil and for Computec, Colombia, why not for Veda? The risk premium associated with the launch of a third credit bureau, in the relatively small Australian credit bureau market, against well entrenched competition, such as Veda and D&B Australian, must be higher than buying Veda.
What does Experian have up its sleeve to undertake such a gamble? It is one way to bring down the price of credit reports or perhaps it is a way of forcing Veda’s owners to capitulate?
Experian announced on May 5th its agreement to establish a credit bureau with six of Australia’s leading financial institutions to provide consumer and business credit information in Australia. The formation of the joint venture is subject to regulatory approval.
Experian will be responsible for the operations of the credit bureau and will own 76% of the entity. The following six financial institutions will own 24% of the venture: ANZ, Citibank, Commonwealth Bank of Australia (CBA), GE Capital, National Australia Bank (NAB) and Westpac Banking Corporation.
The new bureau will enable lenders to assess risk and provide credit more efficiently and consistently, particularly in light of forthcoming plans to permit positive data sharing, which is currently under consideration by the Australian government. The joint venture builds on the financial sector relationships Experian has established in Australia through its Decision Analytics business.
On receipt of regulatory clearance the joint venture company, Experian Australia Credit Services Pty Ltd, will be established with initial gross assets of A$30m. Source: Experian Group
