By Agence France-Presse
Australian gambling giants Tabcorp and Tatts were Tuesday given the green light by the competition tribunal to merge, paving the way for the creation of a betting powerhouse following months of uncertainty.
The rival Australian-listed firms announced their plan to merge in October, but the proposal encountered several hurdles including questions raised by the Australian Competition and Consumer Commission about the impact on competition in Queensland state.
The Australian Competition Tribunal — which Tabcorp took the deal to in order to sidestep the watchdog — gave it the go-ahead provided the firm sold its Queensland gaming business.
“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,” tribunal president Justice John Middleton said.
Tatts and Tabcorp have pursued the idea of closer ties for years in a bid to cut costs and chase opportunities globally, and investors welcomed the decision, which would see the formation of a Aus$8.6 billion (US$6.5 billion) titan.
Shares in Tabcorp rose 4.86 percent to Aus$4.85 while Tatts was up 4.08 percent at Aus$4.34, after both lifted a trading halt in Sydney on Tuesday afternoon.
Tabcorp’s chairman Paula Dwyer said the merger would allow the new entity to be “well positioned to invest, innovate and compete in a global gambling entertainment marketplace”.
The company — which runs betting operations in Victoria and New South Wales and has a broadcasting and media arm built around Sky Racing — said about Aus$130 million a year would be added to gross operating income from synergies and other improvements.
Tatts, which has a betting shop network in Queensland, South Australia and Tasmania and also operates a lotteries business, added that it was working with Tabcorp on the remaining government and regulatory approvals.
Both companies also compete in online gambling.
The merger is expected to kick in after a Tatts shareholder meeting in August.
The plan had also been challenged by a consortium led by US private equity firm KKR, which lobbed in a bid in December that was later withdrawn after it was rejected.
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