The proposed $11 billion merger of gaming giants Tabcorp and Tatts Group is likely to increase competition and will benefit customers and the racing industry, the Australian Competition Tribunal (ACT) says.
In its reasons for approving the proposed merger a second time last week, the ACT rejected contentions that the merger would be anti-competitive, finding it would be likely to encourage competition.
"The proposed merger is consistent with the trend towards industry consolidation, with the merged entity itself acquiring greater scale in addition to lower costs," the ACT said.
"The merged entity will be a more effective competitor, and the merger is likely to lead to greater competition particularly in online wagering."
"This increased competition brings about competition benefits to the racing industry and to consumers, and would add to the likely positive net effect of the proposed merger."
The ACT said the merger would allow Tabcorp and Tatts to compete effectively with corporate bookmakers.
Detriments identified by the Australian Competition and Consumer Commission and online wagering firm CrownBet were unlikely to arise, or were not material, the ACT said.
It said competition is a process that drives prices, quantities traded and their allocation between buyers and sellers.
The competitive process may therefore encompass takeovers and mergers where this lowers industry costs.
Cost reductions freed resources for use elsewhere in the economy, and increased profitability generated benefits for Australian shareholders, the ACT said.
The Tatts Group board said on Thursday that it was appropriate to provide further information about the proposed merger and the ACT's decision to shareholders.
It has therefore postponed the company's annual general meeting and scheme meeting to consider the merger to December 12.
Tatts shares were down 3.5 cents at $4.365 at 1430 AEDT, and Tabcorp shares were down three cents at $4.95.
