accc-vetoes-tabcorps-merger-with-unitab

ACCC vetoes TabcorpÆs merger with Unitab

The Australian competition watchdog rules against the A$2.1 billion deal due to structural concerns.
One of the largest M&A deals in AustraliaÆs pipeline has been blocked with the Australian Competition and Consumer Commission (ACCC) ruling against the merger of gaming companies Tabcorp and Unitab.

The chairman of the ACCC, Graeme Samuel, put an end to the merger plans on Wednesday when he opposed the deal on the grounds that it would substantially lessen competition in a number of betting markets, in particular the pooling of TAB bets.

He says the merger of the largest and second largest gaming companies in the country would ôremove Unitab as the only alternative supplier of pooling services in Australia which would also have significant consequences for potential new entrants to wagering marketsö.

The ACCC highlighted these concerns two weeks ago (see FinanceAsia.com story on 3 August, 2006) and was reviewing an undertaking by Tabcorp to address the concerns before making its final decision.

Samuel says TabcorpÆs undertaking was not acceptable because ôthe competition concern is structuralàand the proposed undertaking is behaviouralö.

ôTabcorp has offered to take certain commercial actions that it believes would remedy the ACCCÆs concerns,ö says Samuel. ôBut the ACCC doesnÆt consider that behavioural undertakings, by themselves, can satisfactorily resolve structural competition concerns.ö
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