Australian giants in talks over potential merger

Australian giants in talks over potential merger

Tabcorp and Tatts would merger into an US$7.6 billion enterprise.

Australia.- Yesterday during trading halts, Tabcorp and Tatts issued separate statements to the Australian Security Exchange in order to ask for a negotiation pending a “potential change of control transaction.” The Australian leading sports betting operator and the biggest lottery company in the country could create an US$7.6 billion merger.

The seeming negotiation repeats last year’s intentions, where both gambling giants set several meetings to present a joint project in November 2015. Later that month, the companies dropped the discussions and admitted to have failed on any potential merger terms. However, the two companies’ requests for trading halts presented on Tuesday morning were almost identically worded.

“The trading halt is requested pending the outcome of discussions in relation to a potential change of control transaction pursuant to a scheme of arrangement that is under consideration by Tabcorp,” expressed Tabcorp’s statement. If both gaming companies agree this time, they would create a unified bookmaker at national level, merging current retail assets in Victoria and New South Wales, where Tabcorp leads the market, and Queensland, South Australia and the Northern Territory, where Tatts operates its lotteries.

Tabcorp posted a net profit after tax of US$129 million on revenue of US$1.6 billion. Tatts had a full year profit was of US$2 million on revenue of US$2.2 billion. The merger has been predicted to create between US$60 million and US$76 million in synergies by consolidating IT platforms, administrative functions and by reducing headcount.