Two of Australia’s biggest gambling businesses, Tabcorp and Tatts Group, have agreed to a AU$11.3bn (US$8.7bn) merger.
On completion of the transaction, existing Tabcorp shareholders will own approximately 42 per cent of the combined group and existing Tatts shareholders will own approximately 58 per cent.
Boards of both companies unanimously agreed to the deal, which will effectively give Tabcorp control of the merged business.
Tabcorp chairman Paula Dwyer said: “This transaction is expected to deliver significant value for both sets of shareholders, and material benefits to other key stakeholders including the racing industry, business partners, customers and governments.”
“In wagering, combining our two complementary businesses will give us a national footprint and could create a pathway to larger wagering pools,” Dwyer added.
According to a filing from Tabcorp to the Australian stock exchange on Wednesday, the merger is expected to result in at least $50m per annum of additional funding to the Australian racing industry.
The operator is also expecting net one-off integration costs of approximately $110m.
Matthew Felsman, a wealth adviser at AAP Securities, said: "”The entry of large global operators such as William Hill and Sportsbet could have helped push a deal across the line as they have taken a sizeable slice of the local wagering market.”
Completion of integration is expected to take approximately two years, the operator said.
