Australian gambling companies Tabcorp and Tatts Group have announced plans to merge and create a combined business worth approximately A$11.3 billion (€7.9 billion/US$8.7 billion).
In a statement, the two brands said that the merger would establish a “leading, diversified portfolio of gambling entertainment businesses well placed to compete in a rapidly evolving marketplace and pursue growth opportunities globally”.
The operation would have a combined revenue of A$5 billion per year, with earnings before interest, tax, depreciation and amortisation over A$1 billion.
In addition, the merger could result in at least A$50 million per annum of additional funding to the Australian racing industry.
The deal has been unanimously approved by the boards of both companies and comes a year after the two brands discussed a merger but failed to reach an agreement.
Tabcorp and Tatts said the deal should go through by the middle of 2017, subject to approval from Tatts shareholders, as well as regulatory and other approvals.
AustralianSuper, one of Tatts’ largest shareholders, has indicated that it intends to vote in favour of the merger.”
Tabcorp added in a statement: “The transaction will create a world-class, diversified gambling entertainment group, with a pro forma enterprise value of approximately $11.3 billion, a national footprint and a diverse suite of product offerings across wagering, media, lotteries, Keno and gaming services.
“The directors of both Tabcorp and Tatts believe the transaction represents a unique and compelling opportunity to create significant value for Tabcorp and Tatts shareholders, a winning offer for customers and material benefits for stakeholders, including the racing industry, TAB agencies, licensed venues, small businesses, and Federal, State and Territory Governments and regional communities.”