The planned merger between Tabcorp and Tatts Group is in danger of collapsing after the Australian Competition and Consumer Commission formally opposed the deal.
In October last year, Tabcorp and Tatts unveiled plans to join forces in a deal that would lead to the creation of a combined business worth approximately €7.3bn/US$8.2bn.
However, according to The Australian newspaper, Andrew McClelland QC, counsel for the country’s competition watchdog, denied Tabcorp claims in the Australian Competition Tribunal that the merger would be of significant public benefit, adding that cost savings set out were “inherently implausible” and “speculative”.
McClelland added: “Although Tabcorp has asserted that some of these cost savings and revenue increases will flow through to the community, the majority of the claimed synergies are proposed to be retained by Tabcorp and should be given little weight.”
The ACCC also picked up on competition concerns that were raised earlier this year, although Tabcorp previously announced plans to sell its Odyssey gaming machine monitoring business to ease any worries.
“The competitive constraint Tabcorp and Tatts impose on each other will be lost with the proposed acquisition and will likely give Tabcorp the ability to increase yields,” McClelland said.
Full Content: Gambling Insider
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