In Australia, the proposed multi-billion-dollar merger of bookmaker Tatts Group Limited with giant rival Tabcorp Holdings Limited has reportedly been dealt a significant setback following a ruling from the nation’s highest civil court issued earlier today.
According to a report from The Sydney Morning Herald newspaper, the Wednesday decision from the Federal Court of Australia was prompted by an appeal from the Australian Competition and Consumer Commission and quashed an earlier approval for the $8.8 billion deal granted by the Australian Competition Tribunal.
The pair initially agreed to merge in October of 2016 and create a new entity offering a wide range of sportsbetting, lottery, keno and gaming services. In order to make this plan a reality, the duo reportedly took the unusual step of bypassing the approval process of the Australian Competition and Consumer Commission to make their case directly to the Australian Competition Tribunal.
The newspaper reported that the Australian Competition Tribunal’s subsequent approval of the merger earlier this year came despite objections from the Australian Competition and Consumer Commission and other operators regarding the large market influence the combined entity could command.
In response, the Australian Competition and Consumer Commission reportedly asked the Federal Court of Australia for permission to conduct a “judicial review” of the approval process due to allegations that the Australian Competition Tribunal had made “reviewable errors” in its assessment of the damages any merger could cause.
Although it ruled that the reasons for its decision would not be made public for at least five days, the Federal Court of Australia reportedly “set aside” the previous approval for the merger on Wednesday and ordered the matter to be “referred back to” the Australian Competition Tribunal for consideration.
“The Australian Competition and Consumer Commission is pleased that the Full Federal Court has set aside the decision,” Rod Sims, Chairman for the Australian Competition and Consumer Commission, reportedly told the newspaper. “However, the reasons for the decision are not yet public.”
Melbourne-based Tabcorp Holdings Limited declared earlier this month that its merger with Tatts Group Limited could be completed as soon as November with the combined entity set to have a market capitalization of approximately $6.9 billion. However, The Sydney Morning Herald described today’s ruling as a “huge setback” while both firms instituted a trading halt just minutes before the judgement was delivered.