Aug. 13 (Bloomberg) -- Westpac Banking Corp. won regulatory approval for its A$17.4 billion ($15 billion) bid to buy St. George Bank Ltd., creating Australia's biggest mortgage lender.

The takeover, the nation's largest banking acquisition, would be ``unlikely to substantially lessen competition,'' the Australian Competition & Consumer Commission said in a statement.

Westpac, which this month overtook National Australia Bank Ltd. as the nation's second-largest bank by market value, agreed in May to buy fifth-ranked St. George, also based in Sydney. Westpac offered 1.31 of its own shares for every St. George share. The deal would leapfrog Westpac past Commonwealth Bank of Australia as the nation's largest mortgage provider.

``There's not a lot that can stand in the way of this deal now,'' said Geoff Wilson, who helps manage $385 million, including Westpac shares, at Wilson Asset Management in Sydney. ``We can't see an alternative bidder cropping up.''

Commonwealth Bank Chief Executive Officer Ralph Norris last month ruled out making a counter offer to Westpac's bid.

Westpac and St. George have about 1,200 branches between them in New South Wales, with a market share of 32 percent, ahead of Commonwealth Bank's 25 percent, analysts at UBS AG estimate.

St. George has commissioned an independent assessment due in September. Shareholders are expected to vote on the deal on Nov. 6 ahead of its completion on Nov. 21, Westpac said on Aug. 8.

Enough Competition

``The ACCC considered that competition in retail banking markets provided by the other major banks and regional banks along with credit unions, building societies and niche players, would be sufficient to constrain the merged firm after the acquisition,'' ACCC Chairman Graeme Samuel said.

Westpac shares fell 4 percent to A$23.51 at the 4:10 p.m. close of trading in Sydney. St. George dropped 2.8 percent to A$30.43, a 1.2 percent discount to Westpac's offer.

Westpac Chief Executive Officer Gail Kelly's strategy of focusing on the home market contrasts with National Australia and Australia & New Zealand Banking Group Ltd., which get about a third of their income from overseas.

Westpac on Aug. 8 said profit will increase as much as 8 percent in the 12 months to Sept. 30 after it avoided the credit- market turmoil that's sparked a slump in banking shares this year. St. George on Aug. 12 said earnings per share will grow 8 percent to 10 percent in fiscal 2008, reaffirming an earlier forecast.

ANZ forecast its biggest profit drop since 1992, while National Australia boosted provisions fivefold for possible securities losses.

A spokesman for Wayne Swan, Australia's Treasurer, declined to comment on the bid.

To contact the reporter for this story: Stuart Kelly in Sydney skelly22@bloomberg.net

Last Updated: August 13, 2008 03:10 EDT