The Australian Federal Court upheld an appeal against the long-discussed merger between the local betting company Tabcorp Holdings and the lotteries operator Tatts Group. If successful, the deal, which was estimated to about AU$11 billion, would create a betting giant that would hold a massive share of the Australian gambling market.
Now, the two companies’ plans for their multi-billion merger have suffered a serious blow, with the Federal Court rejecting the proposed deal. The two operators’ proposed deal is now uncertain, as the Court ruled in favour of the local competition watchdog’s legal arguments aimed to stop the deal’s approval.
Under the court’s orders, the decision of the tribunal would be set aside, and the, while the matter is referred to the Australian Competition Tribunal (ACT) for further consideration. The three Federal Court judges also shared that they would publish the reasons for their decision in five days.
The decision of the Federal Court to send the matters related to the proposed merger back to the Australian Competition Tribunal for further consideration comes as a setback that could take even more time to be resolved, especially considering the fact that the deal was announced a year ago and has already been delayed by the court challenge of the Australian Competition and Consumer Commission (ACCC).
The Way for Tabcorp and Tatts Group So Far
This has been the third attempt of the two operators to join forces in a merger over the past ten years. As mentioned above, if the merger is finally given the green light, it would create an Australian gambling giant that would deal with the competition of online rivals such as William Hill and Paddy Power Betfair.
This June, the Australian Competition Tribunal cleared the way for the two companies’ merger, after it revealed it had been satisfied in all circumstances that the proposed merger would bring major benefit to the public.
Then, in July, the Australian Competition and Consumer Commission filed a federal court order against the proposed merger, insisting for further judicial review of the deal estimated to AU$11 billion. The ACCC, which has been acting as the regulatory body supervising the merger, fiercely opposed to the proposed deal after it expressed its concerns related with a possible negative impact that it could have on local gambling market and competition.
The Australian Competition and Consumer Commission has raised a red flag, saying that the conglomerate would have such a market power that it could actually hurt competition in the region in case that the merger is carried out. Now, the decision of the Australian Federal Court has once again put the proposed deal in danger.
First, the legal actions which the ACCC took against the two companies put their merger plans on hold, and the appeal against the decision of the Australian Competition Tribunal being described as an unprecedented one. Now, it seems that the Federal Court’s decision is to delay Tabcorp and Tatts Group merger even more, and the result of the two companies’ efforts still remaining uncertain.