The Australian Competition and Consumer Commission (ACCC) has dropped its long standing opposition to the AU$11bn merger between Australian lottery operator Tatts Group and Tabcorp Holdings.
This latest move comes after the Australian Competition Tribunal (ACT) approved the merger for a second time last month and just a day after CrownBet, who had been one of the biggest commercial opponents of the merger dropped its opposition to the $11bn deal.
In a statement, ACCC Chairman Rod Sims said: “The ACCC has closely examined the Tribunal’s reasons. Unlike the original decision of the Tribunal we do not consider there is any error of law that needs to be corrected. For this reason the ACCC will not be seeking further review.”
Merger talks between the two companies began in 2016, but were thrown into doubt in early 2017 when the ACCC published a statement of issues regarding the proposed acquisition. As a result of this statement, Tabcorp withdrew its application for informal clearance to proceed with the ACCC and lodged a separate application for authorisation with the Australian Competition Tribunal.
Opponents of the merger claimed that the deal would impact market competition unfairly as well as consumer pricing.
In June, the ACT granted permission for the merger to take place, but the ACCC, and later Australian betting company Crownbet, applied to Australia’s Federal Court for a judicial review of this decision, which was completed at the end of November.
Despite dropping their opposition, the ACCC remained stoic in its belief that the merger might have negative consequences for the Australian gambling industry, with Chairman Sims adding: “While the ACCC takes a different view from the Tribunal on the extent of the public benefits and detriments arising from the proposed merger, there is no avenue of appeal that would test the merits of the Tribunal’s decision.
“The ACCC takes the view that the proposed merger of these two large and close competitors will lessen competition, but because they chose to apply to the Tribunal, the ACCC never reached a conclusion as to whether or not the lessening would amount to a substantial lessening of competition.”