Tabcorp’s odds improve

TABCORP is working to wrap up its $11 billion mega-merger with gaming rival Tatts by August after winning a critical approval from the competition regulator.

Shares in Tabcorp and Tatts both headed higher yesterday after the Australian Competition Tribunal gave the green light to the biggest merger of the year to date.

Tabcorp chief David Attenborough said the tribunal’s decision was a key milestone in the creation of a world class, diversified gambling-entertainment group that is well placed to invest, innovate and compete in a global marketplace.

“In granting its authorisation the tribunal stated it is satisfied the transaction is likely to result in substantial public benefits,” Mr Attenborough said.

Tabcorp took the unusual step of asking the tribunal to rule on the merger after the Australian Competition and Consumer Commission warned it had serious concerns about the power of the proposed combined group.

Mr Attenborough declined to comment on the ACCC’s opposition but said the tribunal had addressed all competition concerns and punters would benefit from the merger.

“We are absolutely focused on building a business that is positive for punters,” he said.

The tribunal, which has required Tabcorp to complete the sale of its pokies monitoring business as part of its approval, will release its full reasons tomorrow.

The ACCC said it would not comment on the decision until it had reviewed the reasons but noted the net public benefit test the tribunal applies is different to the substantial lessening of competition measure it uses in its informal clearance process.

The combined TabcorpTatts group will generate $5 billion in annual revenue from betting shops, online wagering, lotteries, Keno and pokies management services.

It will dominate the nation’s totalisator betting, where bets are pooled and the odds are not fixed, and have exclusive control of racing track vision.

The merger will result in $130 million in annual cost savings and efficiency gain from the first year it is bedded down, according to Tabcorp.

Jobs will be cut as duplication in areas such as IT is removed.