Tabcorp, Tatts win green light for $11 billion merger

Tabcorp, Tatts win green light for $11 billion merger

THE Australian Competition Tribunal has approved the $11 billion merger of Tabcorp and Tatts Group.  The merger of the Melbourne and Brisbane-based gambling companies was granted by the tribunal, despite an objection by the Australian Competition and Consumer Commission.  The approval is subject to only one condition — the sale by Tabcorp of its Odyssey Gaming business in Queensland.

Tabcorp chairman Paula Dwyer and Tatts chairman Harry Boon have voiced their support for the merger. Picture: Stuart McEvoy

The full detail of the decision is expected to be published on November 22.  However, in a statement today the tribunal said it announced its findings ahead of the full decision to avoid insider trading and to keep the market and public fully informed.  Rival gambling group CrownBet had also objected to the merger.  In its statement, the competition tribunal said it was “satisfied that the proposed merger is likely to result in substantial public benefits and that the detriments identified by the ACCC and the interveners are unlikely to either arise or are not otherwise material”.

Tabcorp, which is principally a wagering business, has won approval to merge with Tattslotto operator Tatts Group.

Melbourne-based Tabcorp and Brisbane-based Tatts announced their intention to merge in October last year.  The announcement immediately raised attention of rival suitors for the Tatts Group, including Pacific Consortium — a group made up of US private equity house Kohlberg Kravis Roberts and investment banks Macquarie and Morgan Stanley.  That consortium weighed in with a $7.2 billion bid to buy Tatts.  The offer was subsequently blocked by Tatts, which refused to give the consortium to its books to do due diligence.

Staff at a newsagency man the Tattslotto counter.

In another unusual move during the past few months, Tabcorp also bypassed the ACCC approval process and lodged an application direct with the competition tribunal.

Tatts shareholders are due to vote on the merger with Tabcorp on November 30 after the publication of the tribunal’s full decision.

Shares in Tabcorp and Tatts were put in trading halts this morning ahead of the Australian Competition Tribunal’s announcement. Trading in both stocks is yet to resume.