Tatts and Tabcorp Confirm Merger Agreement
Within 24 hours of confirming preliminary discussions were taking place, Australian wagering giants, Tatts and Tabcorp, have announced that a merger agreement has been reached.
The Australian Competition and Consumer Commission (ACCC) will now review the deal, holding the decision over whether the $11.3 billion merger can progress. The agreement will see Tatts shareholders receiving 0.8 Tabcorp shares, plus 4.25 cents per Tatts share. The merged entity would control in excess of 90 percent of the totaliser betting market in Australia.
“In wagering, combining our two complementary businesses will give us a national footprint and could create a pathway to larger wagering pools,” announced Paula Dwyer, chairman of Tabcorp. “We are excited by this opportunity, which we believe will deliver an enhanced wagering experience for our customers, and, in turn, will generate stronger returns to the Australian racing industry, underpinning its sustainability.”
“At the same time, bringing together our lotteries, keno and gaming services businesses will give us the capability to create an even more compelling offer for customers and retail stakeholders as the combination increases capability, while increasing diversification.”
The merger could be expected to produce an additional $50 million for the racing industry for which it is a significant source of funding. In addition, the merged company would be a likely contender for the WA TAB, which is currently being privatised, and if successful, they would hold 100 percent of that market.
“It comes at a time of escalating competition from new business models and rapid consolidation of gaming and wagering companies globally,” said Harry Boon, Tatts chairman. “The scale and efficiency benefits from this combination will provide a stronger platform in this dynamic environment.”
Once approved by the ACCC, the merger is expected to take two years to complete.
March 30, 2017