The ACCC has signed off on a plan for banks to financially prop up Armaguard.

The Australian Competition and Consumer Commission (ACCC) has granted interim approval for a multimillion-dollar agreement aimed at ensuring the continued distribution of cash across Australia. 

The decision allows Armaguard, a leading cash-in-transit service, to maintain its operations.

Australia's major banks - ANZ, Commonwealth Bank, National Australia Bank, and Westpac - have collaborated with significant retailers such as Wesfarmers, Coles, Woolworths, and Australia Post to support Armaguard. 

The $50 million deal, finalised on June 24, will remain in effect for 12 months.

The ACCC gave the green light for the Australian Banking Association (ABA), banks, and retailers to contribute funds to Armaguard’s cash-in-transit business. 

The ACCC has only approved the financial support portion of the deal. The ABA, banks, and retailers plan to evaluate “operational sustainability and efficiency measures across services under their respective service agreements and with Armaguard’s cash-in-transit business”. Additionally, these parties aim to develop an independent pricing mechanism for their cash services agreements with Armaguard, although it will not be implemented during this interim period.

“We consider that the financial assistance to Armaguard increases the likelihood of a more sustainable supply of wholesale cash distribution services as well as access to cash by businesses and members of the public across Australia,” acting ACCC chair Mick Keogh said.

The ACCC is inviting submissions regarding the operational sustainability and efficiency measures, as well as the proposed independent pricing mechanism, by July 24. 

In March, Armaguard’s parent company, Linfox, had rejected a $26 million emergency funding offer from the ABA, banks, and retailers before agreeing to the current deal. 

“This deal will keep cash moving around the country and ensure it remains available to Australians wherever they live,” said ABA Chief Executive Anna Bligh.

“The 12 months of financial support also gives Armaguard the necessary time to restructure the business and realise the benefits from their merger with Prosegur. 

“It also allows all parties to work through possible long-term solutions for sustainable cash access into the future.”

The ACCC’s interim authorisation provides legal protection for the parties involved, allowing them to proceed with the financial support while the ACCC reviews the broader aspects of the deal. This process is intended to ensure that the public benefit outweighs any potential public detriment.