Aussie Giants – Tabcorp and Tatts Group Enter a Merger

The Aussie wagering market is changing, especially after the merger of two of the biggest Aussie gambling entities. This is because Tatts Group and Tabcorp Holdings have revealed that they have reached terms to merge the two companies together. This merger is going to result in an 11.3 Billion Dollar Aussie wagering powerhouse.

Shares  from the two companies got placed In a trading halt last week,  as a pending announcement was due, which would have a great potential change over the control transactions. The prospect of the merger increased the value of Tatts group share by 15.46 percent, to reach 4.145 Dollars, and Tabcorp also witnessed an increase of 2 percent to reach 4.99 dollars.  The board of directors of the two companies has unanimously agreed on the terms of the merger deal. According to these terms, Tabcorp will be given the control of the newly created merged business. To pitch the idea to the investors, the two companies stated that the newly formed merged entity will be valued at 11.3 billion Australian dollars, and will have market capitalization of almost 8.6 billion dollars, in addition to combined revenue of well over 5 billion dollars.

The Chairman of Tatts group, Harry Boon, stated that this merger is based on a pretty clear industrial logic, as well as a tangible and a strong synergy position. This is because this merger is going to result in the creation of a strong platform that can compete with the other entities in the gambling industry in the Australian market. On the other hand, Paula Dwyer, Tabcorp’s Chairman, commenting on the merger, stated that it will create a diversified and a strong businesses that is well positioned in order to compete, innovate and invest, both in the Australian market and internationally.

Recently, some of the biggest European based sportsbooks like Betfair, Paddy Power as well as Ladbrokes have all reported great and increased success in the Australian market. These reports prompted the merger move for two of the biggest names, so they can hold on to their share of the Australian market.

Regarding the merger, Ladbrokes didn’t make any direct comments, but it stated that its Q3 numbers will give it strength that supports that the company is doing things just right in the Australian market. As a result of the current state government regulations, and following the merger, many are hoping that this will take racing one step closer to national tote. This would include large wagering pools. It is also expected that this merger deal will result in 130 million dollars in synergies, which would result in pretty significant financial returns to the industry. The full integration of the two companies is expected to take 2 years, across lotteries, broadcasting and wagering.