The National Australia Bank was surprised last night by the competition regulator's decision to chunk its $13.3 billion acquisition of AXA Asia Pacific, draining the bank's chances of dominating the nation's fast growing retirement savings market. NAB said it will contemplate on their next move on whether to contest the decision or not.

The Australian Competition and Consumer Commission deterred NAB's bid for AXA APA, with reasons about future competition issues and innovation in the retail funds management sector. ACCC then, will undergo a four-month investigation after the decision was announced.

''At the heart of the ACCC's decisions are concerns about innovation and, as a consequence, future rigorous and effective competition between retail investment platforms,'' ACCC chairman Graeme Samuel told The Australian.

Several investors were shocked by the sudden decision, with most of them expecting a nod by the ACCC.

On the other hand, a spokesperson of AXA AP said last night that the bank will review the decision before releasing a statement.

The bank may choose to contest the ACCC decision or revise a new offer to answer the concerns raised by the regulator.

Last night's decision by ACCC will prove difficult for AXA AP, as it will lose endorsement from AXA's independent directors. One of the conditions set by the directors was the regulatory approval before they can support NAB's proposed acquisition.

Meanwhile, AMP seeks to revive its offer after ACCC revealed its decision.

AMP chief executive Craig Dunn said the ACCC's findings are a "great outcome for Australian consumers."

Dunn added that AMP may open another proposal with AXA AP that would create value for its shareholders and set a price offer that is beneficial to both parties.

The planned acquisition would make NAB dominate Australia's retail superannuation, retirement income, and market funds market, according to analysts.

The ACCC's decision will be expected to redesign the rules on competition.