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Aussie gamers merge to create 11.3 billion dollar giant

Xinhua, October 19, 2016 Adjust font size:

Shareholders from Tatts Group and Tabcorp Holdings will become the biggest winners once the merger to create an 11.3 billion Australian dollars (8.66 billion U.S. dollar) nationwide gaming giant comes into fruition.

Ending a painful 10-year ordeal to bring the two ASX-listed giants together, its believed the merger of the two Australian gaming giants will help fend off international competition that have penetrating the domestic market following gaming deregulation in 2012.

"The offshore bookmakers have been consolidating and have been penetrating our domestic market," Tatts chairman Harry Boon told a teleconference on Wednesday, after announcing the deal.

"The merger of these two businesses creates a stronger platform for us to compete nationally, and globally."

Under the terms of the deal, Tabcorp will pay a 20 percent premium on Monday's 3.59 Australian dollar closing price for each Tatts share prior to the deal's announcement to create an 11.3 billion Australian dollar gaming giant. Both companies were placed into a trading halt on Tuesday prior to the deal's announcement.

The deal however is yet to receive shareholder and Australian anti-trust regulator approval.

Both companies supply fixed odds and sports wagering services. Tabcorp runs the TAB in Victoria and NSW, and Tatts operates UniTAB in Queensland, South Australia, the Northern Territory and Tasmania.

"Our understanding is the proposed merger will require a public review that will examine a range of potential issues and areas of overlap, with the focus on various gaming and wagering services," the Australian Consumer and Competition Commission said in a statement.

Investors cheered the end of the 10-year ordeal with Tabcorp's shares climbing 3.48 percent to 5.06 Australian dollars, while Tatts surged 15.88 percent to 4.16 Australian dollars after exiting their trading halt, lifting the broader market in an otherwise weak session.

The deal is expected to be complete by mid-2017. Endit