Mergers and acquisitions in 2017 are a game changer

Mergers and acquisitions in 2017 are a game changer

A merging spree throughout Christmas looks set to change the face of the global gaming industry, with several new gaming giants created, potentially birthing the next set of industry leaders heading into 2018 and beyond. Multi-million dollar deals involving household names like the UK’s Ladbrokes Coral, NYX Gaming Group and Australian Lottery Operator Tabcorp came in a Christmas bonanza that sent shares soaring and ended months of speculation.

One of the biggest deals of the lot was the merger between Ladbrokes Coral and GVC Holdings, whose long-awaited merger with the sports betting company came at a price tag of around $4bn. The 46/53 split will see GVC as the majority owner of the group, with Ladbrokes Coral taking the rest, overseen by current GVC Chairman Kenneth Alexander. The deal set prices at 160.9p a share.

Over in Australia, a similarly massive merger took place, with lottery operator Tabcorp becoming the whole owners of fellow lottery business Tatts Group in a deal worth more than AU$11bn. The end of another long-awaited acquisition will see the board accommodate the new arrivals, with three Tatts Group employees joining the 11-strong team. Trading in Tatts Group shares has been suspended following the merger’s approval in the Supreme Court of Victoria, with Tatts becoming a subsidiary.

Meanwhile, two local companies in Las Vegas became one as NYX Gaming was acquired by Scientific Games. The global gaming names met to allow the merger at a meeting of shareholders in Las Vegas and agreed to merge via a court in Guernsey, pending approval by a Guernsey judge at the Royal Court. This creates a true gaming giant, combining an industry-leading content portfolio with a platform and digital network to match in a deal worth more than $630m. This adds much-needed global reach to an already popular and well-regarded platform to create a more marketable whole.

Only one potential bear trap remains in the way for the Ladbrokes Coral and GVC deal, in the form of a pending decision by the UK Government on what restrictions to place on fixed odds betting terminals. If the decision is the clamp down on their use, it has the potential to put a dent in Ladbrokes Coral’s value and wipe millions of pounds off the value of the company’s assets. In this case, the terms of the merger could be different, with the price being negotiated down to match.