Australia’s Tabcorp and Tatts Merger Given Go-Ahead
Earlier this week the Australian gambling giants Tabcorp and Tatts were given permission by the competition tribunal to merge and create a giant betting powerhouse.
The companies announced their plans to merge in October but the plans encountered a number of hurdles including questions from the Australian Competition and Consumer Commission about the impact on competition in Queensland.
However, in the end the Australian Competition Tribunal give the deal the go ahead on condition that Tabcorp sold its Queensland gaming business.
Tribunal president Justice John Middleton said, “The tribunal is satisfied in all the circumstances that the proposed merger would result, or would be likely to result, in such a benefit to the public that the acquisition should be allowed to occur.”
Tatts and Tabcorp have been looking at forming closer ties for a number of years as they attempt to cut costs and expand abroad. Furthermore, investors have welcomed the decision and the resulting company is expected to be worth AUS$8.6 billion.
Following the news shares in Tabcorp rose 4.86% and Tatts was up 40.08%.
Paula Dwyer, Tabcorp’s chairperson, said the merger would allow the new entity to be “well positioned to invest, innovate and compete in a global gambling entertainment marketplace”.
Tabcorp is expecting about AUS$130 million per year to be added to gross operating income from synergies and other improvements.
Tatts, which runs a network of betting shops and a lottery business, has said that it is working with Tabcorp on the remaining government and regulatory approvals. The merger is expected to happen after a Tatts shareholder meeting in August.