By Ben Blaschke
Australian racing giant Tabcorp’s AU$11 billion merger with Tatts Group is set to proceed after it was given the green light by the Australian Competition Tribunal on Tuesday.
The decision by Justice John Middleton comes eight months after the original deal was struck and six weeks since the case began, with Tabcorp’s decision to go straight to tribunal rather than rely on Australian Competition and Consumer Commission (ACCC) approval paying big dividends.
It is hoped the merger, which will see the new conglomerate hold a virtual monopoly on para mutual betting plus control racing vision across the country through its Sky Racing network, will lead to a national tote and larger betting pools similar to Hong Kong and Japan.
Opponents of the deal – led by the ACCC and Racing Victoria – argued that it was anti-competitive, with complete control of racing vision giving Tabcorp huge leverage over corporate bookmakers in Australia’s pubs and clubs. They also questioned the likelihood of a national tote becoming reality due to the vastly different regulations governing the racing industry from state to state.
But Justice Middleton dismissed those concerns, stating, “As the Tribunal is satisfied that the proposed merger is likely to result in substantial public benefits and that the public detriments identified by the ACCC and the interveners are unlikely to either arise or are not of significance, the Tribunal is satisfied in all the circumstances that the proposed merger would result, or would be likely to result, in such a benefit to the public that the acquisition should be allowed to occur.”
The only condition on the merger proceeding is that Tabcorp must divest its slot machine monitoring service Odyssey over potential conflict of interest concerns. Tabcorp was quick to confirm its intention to sell Odyssey following the tribunal’s ruling, with Australian National Hotels Pty Ltd the agreed buyer.
Tabcorp Chairman Paula Dwyer said, “Tabcorp welcomes today’s decision by the Tribunal. It represents an important step towards creating a world class, diversified gambling entertainment group that is expected to deliver significant value for both sets of shareholders and material benefits to other key stakeholders including Australian racing industries, business partners, employees, customers and governments.
“The combination will bring together two great Australian businesses, well positioned to invest, innovate and compete in a global gambling entertainment marketplace.
“Tabcorp acknowledges the support received from many stakeholders, including the racing industry, our business partners and shareholders. Their backing is an endorsement of the extensive benefits that the Transaction offers to our stakeholders.
“We look forward to continuing to work with Tatts to successfully complete the Transaction and are working towards implementation in August 2017.”
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