Tabcorp has been planning to whip into shape a business worth AU$11.3 billion together with Tatts Group since 2016. This has been met with challenging objections from competitors but the Australian Competition Tribunal (ACT) gave them a go-ahead this Tuesday, stating that the merger has “substantial public benefits” including an increase by 5% in shares for both companies.
Tabcorp and Tatts Group – Victory with Conditions
President of ACT, Justice John Middleton has given this merger a go ahead, but not without conditions. Tabcorp has been ordered to sell its Odyssey Gaming Services business in Queensland as they had previously reported they would early this year. They had said that they would do this under the condition that the ACT approves the proposed merger.
The merger is said to be completed by August. Tabcorp Chairman, Paula Dwyer said that “The combination will bring together two great Australian businesses, well positioned to invest, innovate and compete in a global gambling entertainment marketplace”
Tatts Group’s shareholders have been assured that its board continued to believe that the deal is in their best interests. The combined companies are estimated to bear earnings of at least AU$130 million annually, this is expected to be realised in the first year after completion of the merger.
Paula Dwyer continued to state that “[It] is expected to deliver significant value for both sets of shareholders and material benefits to other key stakeholders, including, business partners, employees, customers and governments”
Further decisions by the ACT regarding this merger will be made public later this week.