The Australian Competition and Consumer Commission (ACCC), which currently acts as the country’s competition regulatory body, has called for a new hearing of proposed merger between gambling companies Tabcorp Holdings and Tatts Group to be carried out by the Australian Competition Tribunal (ACT).
The proposal for another hearing of the long-awaited AU$11-billion merger between the two gambling operators could end up causing another delay of the already prolonged deal process.
Yesterday, the Australian Competition and Consumer Commission made a submission to the tribunal, urging the latter to organise another hearing of the case as soon as possible. In case that the Australian Competition Tribunal takes such a step, Tabcorp and Tatts Group would not be able to go on with their merger according to plan.
Despite the fact that its merger approval appeal was backed by the local Federal Court, the ACCC still argued whether it is the ACT that is the relevant jurisdiction to make a final decision on the Tabcorp-Tatts merger application. According to the Commission, the most logical step that could be taken by the two gambling companies is to make a new application for approval in order to avoid possible further disputes.
Tabcorp-Tatts Merger Faces Another Setback
The delay is the latest setback faced by the two gaming giants on the way to consolidation after the ACT initial approval of the merger was brought back for further consideration to the Tribunal, after the Federal Court found that ACT’s decision from June could be flawed.
The shareholders of Tatts Group were expected to vote on the two companies’ proposed deal on October 18th, but things have changed and such vote seems hardly possible now, with the national competition tribunal saying that further hearings on the case could be given a start on October 24th. The Australian Competition Tribunal has been put under a lot of pressure to reconsider the AU$11-billion deal between the two companies after the Federal Court ruled in favour of the local competition watchdog.
Now, the case has been sent back to the Australian Competition Tribunal, as according to the Federal Court’s ruling the ACT’s decision had wrongly overlooked ACCC concerns related to the monstrous market power that the combined gambling giant would have on the local gambling market. According to the Australian Competition and Consumer Commission, the competition in the region would be seriously hurt in case that the Tabcorp-Tatts merger is given the green light.
The one good thing for the two gambling operators was that Justice Middleton agreed to accelerate the re-application process time-frame. If he succeeds to do that, the companies may be given the chance to finalise the deal before the expiration date of the Tabcorp’s offer.
Both Tabcorp and Tatts Group had argued the ACCC appeal, saying that it the Australian Competition Tribunal is exactly the regulatory body which has the jurisdiction to approve the deal. Now, the matter will be sent back to the Tribunal as if the latter has never made a decision at all and would have to review the case from the beginning.
- Author
Olivia Cole
