The AU$11 billion merger between Australian gaming giants Tabcorp and Tatts Group has hit a major hurdle after the Federal Court ruled against its approval by the Australian Competition Tribunal.
In a decision that could have huge consequences for the gaming and wagering industry across the country, the court accepted concerns raised by the Australian Competition and Consumer Commission (ACCC) over the tribunal’s original decision and ordered it be set aside. It also referred the matter back to the tribunal for consideration.
The ACCC applied for the judicial review in July, citing “three reviewable errors” in the tribunal’s earlier finding that the proposed acquisition between Tabcorp and Tatts Group would result in substantial public benefits and no material detriment.
At the time, the ACCC said it believed the tribunal erred by failing to take into account all possible instances of competition being lessened by the acquisition and by failing to compare the likely future state of competition both with and without the proposed acquisition in its consideration of whether the proposed acquisition was likely to result in any detriment. It also sought the review on the grounds that the tribunal made an error in the weight it gave to benefits, such as cost savings and revenue synergies, which would be retained by Tabcorp and not shared with consumers more broadly.
Justice Nye Perram said the reasons for overturning the tribunal’s decision would be made public next week.
Tabcorp and Tatts Group first took their proposed merger straight to the tribunal in March, sidestepping the usual ACCC approval process.
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