WAGERING GIANTS TABCORP AND TATTS GIVEN GREEN LIGHT FOR $11B MERGER
Written on the 20 June 2017 by Ben Hall
THE Competition Tribunal has approved Tabcorp's (ASX: TAH) $11bn takeover bid for Tatts (ASX: TTS) on the condition that it must divest its Odyssey gaming business in Queensland.
The announcement was made this morning after weeks of hearings and was delivered by Federal Court judge John Middleton.
Tabcorp applied to the tribunal for approval of the deal rather than the Australian Competition and Consumer Commission (ACCC), which provided submissions during the hearings and argued against the deal.
The ACCC argued that the claimed public benefits from the deal were "overstated" and said the merger will also result in less competition for wagering licences and racing broadcast rights.
It also argued the $130 million in annual claimed savings and synergies which will result in more funding to racing bodies could ultimately prove to be detrimental to wagering customers as that revenue would be made from improving Tatts' fixed odds betting system.
However, Justice Middleton said the merger provided "substantial public benefits" and detriments raised by the ACCC and corporate bookies were either unlikely to arise or of no significance.
Both Tabcorp and Tatts went into a trading halt this morning ahead of the ruling.
This is seen as a positive for Tatts which last traded at $4.17 on yesterday's close.
The decision was announced eight months after Tabcorp and Tatts announced their intentions to merge and create a multi-billion dollar wagering company which angered rival betting companies including Racing Victoria, along with the ACCC.
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Author: Ben Hall