Tabcorp and Tatts have been waiting since last year October for approval to merge. The merger was approved in June, but the Federal Court set aside the decision and referred the union to the Australian Competitor Tribunal (ACT) for further evaluation.
After a court-ordered review on competitor concerns took place, the ACT approved the AU$8.6 Billion merger. Tabcorp and Tatts decided to merge to cut costs and pursue opportunities globally.
On Friday, shares in both Tabcorp and Tatts was in a trading pause ahead of statements by both Australian firms. The ACCC chairman Rod Sims stated that they pushed for the court review to clarify the laws. He further explained that the ACT was required to take into consideration all the competitive detriments that were likely to arise from the merger.
Tabcorp was required to sell Odyssey gaming before authorisation was granted to obtain shares in Tatts. The ACT added that the disadvantages identified by the Australian Competition and Consumer Commission (ACCC) were unlikely to arise. The ACCC raised concerns about the impact on Queensland’s gambling services. The stance was seen to be consumer friendly which led Tabcorp to approach the ACT to avoid competition concerns.
The ACT said that they are satisfied with the outcomes which the fusion would bring and it is a benefit to the public. The tribunal stands behind the joining companies, and therefore they feel that the acquisition should occur.
However, the ACT is required to publish their complete findings and their final decision on the 22nd November.
Tabcorp runs a broadcasting and media firm created around Sky Racing. It has betting shop networks in Victoria and New South Wales and is the owner of a Queensland gaming monitoring business, Odyssey gaming.
The Tatts Group owns a lottery business and has betting shop networks in Queensland, Tasmania and South Australia. Thus, making the firm’s competition in online gambling. Therefore, they decided to merge to have a bigger operation, which will be greater than other competition.