Following an arduous nine-month regulatory compliance review, the AUS $11 billion merger of Tabcorp Holdings and Tatts Group has received approval by The Australian Competition Tribunal (ACT).
Tabcorp governance this morning issued a corporate update detailing the ACT’s ‘merger greenlight’, with full details of its competition review expected to be published on Thursday 22 June.
Updating investors, Tabcorp governance stated that the extensive review undertaken by the ACT had fulfilled the competition concerns from multiple market stakeholders, including Australian racing codes, media owners, sports clubs, government bodies and the overall business community.
Paula Dwyer, Chairman of Tabcorp commented on the ACT decision “Tabcorp welcomes today’s decision by the Tribunal. It represents an important step towards creating a worldclass, diversified gambling entertainment group that is expected to deliver significant value for both sets of shareholders and material benefits to other key stakeholders including Australian racing industries, business partners, employees, customers and governments.
“Tabcorp acknowledges the support received from many stakeholders, including the racing industry, our business partners and shareholders. Their backing is an endorsement of the extensive benefits that the Transaction offers to our stakeholders.”
The ACT’s merger approval will be long awaited welcome news for Tabcorp investors who have endured a rough 2017 with the company being penalised AUS $45 million by financial watchdog AUSTRAC for multiple compliance failures.
The nine-month competition review of Tabcorp-Tatts has been an onerous process for both parties. Last March an under pressure Tabcorp governance decided to switch regulatory supervising body from the Australia Competition & Consumer Commission (ACCC) to the ‘stakeholder friendly’ ACT.
Throughout the review, a number of Australian competitors such as Racing Victoria and Crownbet have raised market concerns relating to the combination. The firms protested that the merger parties had to reveal its full new business details with regards to race wagering and pricing a market that the new enterprise would completely dominate.
Acting as merger lead Tabcorp governance has highlighted that the business combination expects to deliver $130 million a year in earnings through cost savings and synergies.
Becoming the outright Australian market leader, Tabcorp-Tatts will likely seek to expand its business internationally with the company seeking to compete within licensed markets for bookmaking and lottery services.