The tortuous progress of the long planned AU$11bn merger between Tabcorp and Tatts has been eased after the Australian Competition Tribunal (ACT) gave the deal the go-ahead, for the second time.
The case had been referred back to the ACT for a second review, following opposition to the deal from the Australian Competition and Consumer Commission (ACCT) and rival betting operator CrownBet which was voiced to the full Federal Court, which granted a Judicial Review in September.
Approval has now come again from the ACT with one condition; Tabcorp must sell Odyssey Gaming Services in Queensland, something the gaming operator had already agreed, stating: “As announced on 18 April 2017, Tabcorp has agreed to sell Odyssey to Australian National Hotels Pty Limited, a subsidiary of Federal Group.”
Justice John Middleton released a brief statement after the ruling, with the tribunal set to publish its full reasons on Wednesday 22 November: “As the tribunal is satisfied that the proposed merger is likely to result in substantial public benefits and that the detriments identified by the ACCC and the interveners are unlikely to either arise or are not otherwise material, 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 ACCC has also been satisfied. Chairman Rod Sims said: “When the ACCC sought review of the Tribunal’s earlier determination, our purpose was to clarify the law. We achieved that objective, with the Full Court making it clear that the Tribunal was required to take into account all competitive detriment that is likely to result from the proposed merger.
“The Tribunal has now reconsidered the evidence, in relation to both anti-competitive detriment and public benefit, and concluded that the merger is likely to result in such benefit that it should be permitted to proceed.”
Tabcorp insists it is still working towards a 2017 merger, adding: “Tabcorp continues to work towards implementing the Transaction prior to the end of the 2017 calendar year.
“As previously announced, Tabcorp has obtained all necessary State and Territory pre-implementation approvals in relation to the Transaction.”
This could be pushed back, however, with a 28 day appeals period following the full results being published later this week.
The merger agreement, which would create Australia’s second largest gambling company, is due to expire on 31 December if not approved beforehand.