The Australian Competition Tribunal today approved the $11 billion merger of gaming companies Tabcorp and Tatts.
The Federal Court in September knocked back the merger on an application from the competition watchdog, the ACCC (Australian Competition and Consumer Commission), and sent the issue back to the tribunal for reconsideration.
However, today the tribunal found the merger would have a substantial benefit.
ACCC Chairman Rod Sims says the purpose of taking the matter to court was to clarify the law.
Tabcorp and Tatts had tried to bypass ACCC approval by going directly to the Australian Competition Tribunal.
“When the ACCC sought review of the Tribunal’s earlier determination, our purpose was to clarify the law,” he says.
“We achieved that objective, with the full court making it clear that the tribunal was required to take in to 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.”
The Tribunal expects to publish its reasons next week. The ACCC will then consider the Tribunal’s reasons for the decision.
The merger brings together TAB betting, lotteries, Keno and gaming services with an enterprise value of $11.3 billion and a market capitalisation of $8.6 billion.
After the merger, Tabcorp shareholders will end up with 42% of the combined group and Tatts about 58%.