The Offer to Buy Tatts Group by Tabcorp Holdings Raises Concerns
The Australian regulator of national competitions has shown its concerns rewarding the buyout of Tatts Group. This proposal is worth 4.44 billion dollars, and it was given by Tabcorp Holdings Ltd, the rival of Tatts Group. The regulator expressed such concerns because it is afraid of the effects that this merger might have on the gaming, racing media and wagering industry.
The Merger between Tatts and Tabcorp
One of the biggest bookmakers in Australia, which is based in Melbourne, has a capitalization of almost three billion dollars. This company is none other than Tabcorp Holdings Ltd. The company owns multiple brands in the Aussie brands. This includes Sky Racing as well as Tab.com. It also has experience in the UK market through its partnership with The Sun. the company has been going through many negotiations in order to buy its rival company. This rival company is Tatts Group with is based in Brisbane. These negotiations have been going since November of 2015. This merger, if it succeeds, will manage to create stiff competitions to big names in the industry like Unibet, William Hill and Ladbrokes. The deal was awaiting the needed regulatory approvals and this includes the consumer commission and the Australian Competition regulator.
Complex Issues Regarding the merger
The Aussie Competition and Consumer commission chairman, Rod Sims has stated that the merger raises many complex competitions issues. He has made that announcement before the 4th May, which is the date on which the decisions will be made. He continued by stating that the issues were raised by industry participants and they are of a various nature in different areas of the industry. These issues will have to be taken into consideration and will have to be examined in detail before a decision is made.
The preliminary view of the commission shows that the merger is going to substantially lessen the competition in the monitoring supply as well as other services to the pokie venues that are located in Queensland.
Tabcorp Addresses the Commission’s Concerns
To face such concerns, Tabcorp Holding Ltd. has provided the Aussie regulator with a much needed divestment proposal. This proposal is going to see the company offload its monitoring of electric pokies in Queensland, Odyssey.
Rod Sims also stated that the commission is also concerned because Sky Racing is the dominant broadcaster of the racing content. This is why the merger is most likely going to increase the main power that is already held by Tabcorp Holding when it comes to dealing with the racing media holders and licensed venues.
This merger is going to result in a combination of the land based wagering operation in Tasmania, the NT Area, Tasmania and Queensland. The commission has noted that there is little competitive overlap as the pair mainly compete for telephone and online clients.