<article><p>Tabcorp Holdings Ltd. agreed to buy Tatts Group Ltd. in a deal valued at A$6.4 billion ($4.9 billion) to create a pan-Australian betting company to take on online rivals such as Bet365 Group Ltd.</p></article>

<p>Tabcorp Holdings Ltd. agreed to buy Tatts Group Ltd. in a deal valued at A$6.4 billion ($4.9 billion) to create a pan-Australian betting company to take on online rivals such as Bet365 Group Ltd.</p>
<p>Tatts shareholders will receive the equivalent of A$4.34 a share in cash and Tabcorp stock, 21 percent more than Tatts’ last closing price, the companies said in a statement Wednesday. Tatts stock rose in Sydney and traded shy of the offer price after the deal was announced.</p>
<p>Overseas rivals such as Bet365, William Hill Plc and Ladbrokes Plc have made day-and-night online betting accessible to Australians. While a combination of Tatts and Tabcorp may face domestic antitrust concerns, the group would have funds to bolster its Internet betting business to compete with offshore challengers, said IG Ltd.</p>
<p>To read more details on the deal, click here.</p>
<p>“It had to happen to take on the foreign raiders,” said Evan Lucas, a market strategist at IG in Melbourne. “To merge to form a balance sheet with the synergies that would come from a deal like this makes complete sense.’’</p>
<p>Tabcorp gained 1.8 percent to A$4.98 at 11:09 a.m. in Sydney, swelling the value of the stock-and-cash offer to A$4.40. Tatts jumped 15 percent to A$4.14.</p>
<p>The merged entity will take bets on horse racing, greyhound racing and sports matches across Australia. It will have wagering licenses stretching out to the end of this century in three states, including the most populous New South Wales.</p>
<h3>Attractive Terms</h3>
<p>Tabcorp and Tatts, which have engaged in tie-up talks several times, ended discussions in November on a merger of equals with no premium.</p>
<p>Tatts shareholders will receive 0.8 Tabcorp shares and 42.5 Australian cents cash for each share, according to the terms of Wednesday’s agreement. The companies said the union is expected to deliver at least A$130 million in annual savings.</p>
<p>&#8220;We are in favor of the deal, the synergies are material,” said Paul Skamvougeras, head of equities at Perpetual Ltd., Tatts’ biggest shareholder. “The terms are particularly attractive for Tatts shareholders.”</p>
<h3>Competition Concerns</h3>
<p>The deal needs competition approval, and  according to Rod Sims, chairman of the Australian Competition and Consumer Commission, it raises &#8220;major concerns,&#8221; the Age newspaper reported Wednesday. Sims said before the deal was announced that “there’s a lot of overlap” between the two companies and the commission would also consider whether new online competition is strong enough to constrain an enlarged group, the Age reported.</p>
<p>“Combining our two complementary businesses will give us a national footprint and could create a pathway to larger wagering pools,” Tabcorp Chairman Paula Dwyer said in the statement. “In today’s rapidly changing landscape, bringing together our businesses will create a strong and diversified business that is well placed to invest, innovate and compete, both in Australia and globally.”</p>
<p>Tatts offers wagering on horse racing and sports matches in Queensland, South Australia and Tasmania states and also operates a lotteries business. Tabcorp holds licenses for similar activities in Victoria and New South Wales states, according to its website. Both companies also offer online wagering services.</p>
<h4><em>Bloomberg</em></h4>


Tabcorp Holdings Ltd. agreed to buy Tatts Group Ltd. in a deal valued at $4.9 billion to create a pan-Australian betting company.

Tabcorp to buy Tatts Group for $4.9b to form pan-Australian betting giant

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Tabcorp to buy Tatts Group for $4.9b to form pan-Australian betting giant

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