The Tatts Group Ltd has just one more hurdle to clear before it can commence its long-anticipated deal with racing-betting firm Tabcorp Holdings Ltd.
Tabcorp’s takeover of the Tatts Group has been a source of speculation, contention and anticipation since it was first proposed in Q4 of 2015.
However, after the Australian Competition and Consumer Commission (ACCC) dropped its opposition to the merger at the end of November 2017, the two companies have since moved a step closer to completion.
“The ACCC has closely examined the Tribunal’s reasons. Unlike the original decision of the Tribunal we do not consider there is any error of law that needs to be corrected.
For this reason, the ACCC will not be seeking further review,” ACCC Chairman Rod Sims explained in a November press release.
Board Backs Takeover
With the Australian Competition Tribunal voting to approve the $6.4 billion deal, also in November, the Tatts Group board was able to vote on the longstanding offer at the state of December. After reviewing the proposal, 75 percent of shareholders approved the takeover bid, which means it can now be sanction by the government.
Ahead of an approval hearing at the Supreme Court of Victoria on December 13, Tabcorp officially offloaded Odyssey Gaming Services (Odyssey). As part of the conditions set out by the Australian Competition Tribunal, the racing-betting firm had to divest its interest in the gaming machine subsidiary.
Australian National Hotels Pty Limited had previously agreed to purchase the company back in April, so Tabcorp was able to complete the deal in a matter of hours.
New Entity to Capitalise on Burgeoning Gambling Market
At this stage, everything is now set for the merger, which means the Tabcorp-Tatts partnership will become the biggest player in the Australian betting world.
With a combined value of $11 billion, Tabcorp-Tatts will not only have the resources to expand their current interests in the racing and lottery sectors, but the industry as a whole. Indeed, with the 33rd annual Australian Gambling Statistics report showing that Aussies are now betting more than ever, the deal seems to have come at the right time for both companies.
As well as the market being worth $24 billion, the Australian Gambling Research Centre has found that 6.8 million Australians now ante-up each month. Based on these figures, the market conditions will certainly be in the new entity’s favour when it official merges in 2018.