Tabcorp and Tatts Sign New Partnership Deal
In the latest Australian gambling news, sports betting giants Tatts Group and Tabcorp have announced hopes to form a large-scale partnership that will fend off overseas gambling competitors. The two corporations, which are often in competition between themselves, are set to join forces soon in an effort to maintain the integrity of the Australian betting industry.
In a surprising development, the two gambling giants have agreed to form a partnership that is worth over AU$11 billion. This deal has been made in the hope that overseas gambling operators who are looking for takeover opportunities will be discouraged.
In a recent press release, Tabcorp Holdings Limited made the announcement that themselves and Tatts have reached a final agreement. Australian shareholders in Tatts Group will be awarded 0,8 Tabcorp shares for each of their Tatts shares, along with 42.5c extra per share.
Australian Gambling Giants Sign Merger After Third Attempt
This will be a third time that the companies have attempted a merger, following unsuccessful attempts in 2006 and again in 2015. Regulators were quick to put an end to the 2006 merger, and the two firms could not come to an agreement over terms last year.
However, the Australian betting market today is considerably more competitive than it was a decade ago. The competition watchdog will closely scrutinise the companies’ proposals, but may receive the merger favourably when considering the massive foothold that overseas gambling firms have established in the country.
The racing industry in Australia will also benefit from the merger. Tabcorp has stated that the deal will provide “a range of benefits for stakeholders”, including a $50 million injection into the racing market per year.
New Deal May Discourage Competition From Overseas Operators
With Tatt Groups’ lottery operations and Tabcorp’s sports betting investments, the deal will oversee betting across the country. Tabcorp will also acquire Tatt’s lotteries business, with the power to grant licenses in almost all Australian states.
The deal will also massively boost Tabcorp and Tatts’ share of online betting Down Under. As Tabcorp’s mobile betting business increased substantially in the last financial year, promising developments may appear in this channel as well.
As expected, the new merger will be a considerable blow to overseas betting companies who are interested in a potential takeover. Tabcorp Chairman Paula Dwyer noted that bringing the two businesses together will create a strong and diversified business that is well-placed in both Australian markets and internationally.
As Tabcorp has had issues in the past regarding overseas betting sites imposing on its sport betting business, the deal will create a stronger platform for both Tabcorp and Tatts to compete nationally and on a global scale against outside operators.