Tabcorp Holdings has been given the go-ahead from the Australian Competition Tribunal for its proposed merger with lottery giant Tatts Group, according to an ASX announcement from Tabcorp on Tuesday.
The tribunal noted it is “satisfied that the proposed merger is likely to result in substantial public benefits,” according to president, John Middleton in a written summary on Tuesday.
The merger is subject to the condition that Tabcorp divest its interests in its Odyssey gaming services business in Queensland.
The tribunal is expected to publish its reasons and formal determination on Thursday, June 22, 2017.
Tabcorp chairman Paula Dwyer said: “Tabcorp welcomes today’s decision by the Tribunal. It represents an important step towards creating a world class, diversified gambling entertainment group that is expected to deliver significant value for both sets of shareholders and material benefits to other key stakeholders including Australian racing industries, business partners, employee, customers and governments.”
Tatts Group echoed the sentiments expressed by Dwyer.
“The Tatts Board continues to believe the proposed transaction is in the best interests of Tatts shareholders and unanimously recommends the Proposed Transaction,” said the group in a statement.
The go-ahead from the Australian regulator means that the deal can now be presented to shareholders for approval.
The A$11.3 billion ($8.7 billion) merger was first announced in October 2016, with analysts noting it could help defend against popular online rivals.
According to a filing from Tabcorp to the Australian Stock Exchange at the time, the merger is expected to result in at least A$50 million per annum of additional funding to the Australian racing industry and A$130 million of annual EBITDA synergies and business improvements, net of benefits to the racing industry in the first full year of integration.
Completion of integration is expected to take approximately two years.