The merger between two of South Africa's leading casino operators, Gold Reef Resorts and Tsogo Sun, finally went ahead on February 24.
On February 18, 12 months after initially announcing the proposed merger, Gold Reef announced to the stock market that all conditions relating to the deal were either fulfilled or waived, paving the way for the transaction to be completed the following week.
One condition thought to have held up the merger was the sale of Gold Reef’s Silverstar Casino in Krugersdorp, which the Competition Commission called for on the basis that it competed with Tsogo’s Montecasino in Fourways and would therefore create a monopoly in the region for the newly merged company.
However, the Competition Tribunal is understood to have given the green light to the deal without requiring the sale of the property, effectively making the transaction unconditional.
The new business, Tsogo Sun Holding, now consists of two operating divisions, gaming and hotels. Gaming operations include 14 casinos in six of South Africa’s provinces, ensuring the company is now among the largest operators in Africa.
Brewery SABMiller is exchanging its 49 per cent interest in Tsogo Sun for a 39.7 per cent stake in the new entity as part of the deal estimated to be worth ZAR21bn ($2.9bn).
Jabu Mabuza will lead the new company as chief executive officer.
Marcel von Aulock, who will serve as chief financial officer, told InterGaming that this final approval was welcome news.
"We are delighted that the transaction is finally concluded," he said. "We look forward to integrating Gold Reef into the Tsogo Sun Group."
Joining the two companies is expected to ensure that the new group is able to access additional sources of capital, such as a greater presence within the equity markets, as well as a stronger balance sheet and reduced debts.
