Tabcorp has chosen to ignore competition concerns regarding the Tatts $11 billion merger, by taking it straight to the Australian Competition Tribunal.
Despite trepidations raised by the Australian Competition and Consumer Commission (ACCC) regarding the combination of wagering and media services, Tabcorp has progressed its case to the Tribunal.
While many companies continue to the Tribunal even if their deal has been rejected by the ACCC, Tabcorp has made the move before the watchdog has even made a final determination.
According to a statement from Tabcorp, the company has now “withdrawn its application for informal clearance by the ACCC”.
Tabcorp chief executive, David Attenborough, said the company had taken the review under consideration, but through engaging with relevant stakeholders, including bodies for clubs and pubs, it had become clear many supported the merger.
“After careful consideration of the ACCC’s statement of issues, Tabcorp believes the merger authorisation process will deliver greater transaction certainty,” he said.
Tabcorp also believes the ACCC deal is “limited to assessing whether a proposed acquisition is likely to substantially lessen competition, and is not able to take into account countervailing public benefits”.
ACCC chairman Rob Sims commented on the withdrawal on Monday, stating he was surprised with Tabcorp’s decision.
“Those processes are available. We are surprised they have done what they have done.”
But Tabcorp believes applying to the Tribunal will see the deal cleared faster with decision of approval expected by June 13.
The ACCC has said it would release a final decision on May 4, but noted the deadline could be extended to investigate the concerns, including Tabcorp’s Sky Racing broadcasting services flooding the racing media market.
This concern is based on Tabcorp and Tatts partnerships with racing bodies in New South Wales, Queensland, Victoria and South Australia.
Responding to these concerns, Tabcorp has said strong competition is prevalent in the industry referring to rival Racing.com, which is set to gain thoroughbred broadcasting rights in South Australia.
The ACCC released its statement of issues last Thursday which raised some concerns about the combination of media and wagering services, but found no problem with wagering operations specifically.
“Even though TAB and Tatts are very big players overall in wagering … they do face sufficient competition from the online corporate bookmakers,” Sims said last week.
“We’ve sort of jumped that hurdle.”
The watchdog did have some impact on Tabcorp’s operations as the company was forced to sell its Odyssey Gaming Services business to alleviate competition concerns in the electronic gaming monitoring sector.
Tabcorp revealed on Monday its sale process was “well advanced”.
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