South African casino operator Sun International is to pay the amount of R675 million to Peermont, which, too, runs casino and hotel complexes across the country, after the former’s bid to purchase the latter company was terminated as it could not win the necessary antitrust approval.
Under initial negotiations, Sun International was expected to pay Peermont R900 million in case a transaction did not occur and a gambling complex in Pretoria, South Africa commenced operations. Construction work on Time Square at Menlyn Maine is on schedule and the resort is set to be completed and launched in April 2017. Here it is important to note that the project had been objected to by Peermont before a deal for the merger of the two companies was sealed.
Last March, Sun International announced that it would purchase its fellow casino operator for the amount of R9.4 billion. As part of the deal, the former promised to find a solution to the Menlyn Maine resort dispute. Later in 2015, South Africa’s Competition Commission recommended that the transaction be prevented from completion as it would have negative effects on the gambling market of the Gauteng province, known to be the richest one in the country.
The Competition Tribunal was to discuss the potential deal at series of hearings in June. A final decision on whether the two casino companies would be allowed to proceed with the transaction was to be made by the end of next month.
Sun International was planning to buy its fellow hotel and casino company Peermont Group for R6.5 billion. However, last month, the company announced that the transaction would not take place. It also informed the Competition Tribunal that it has decided to abandon the plan.
Sun International currently manages 26 hotel and casino resorts across Africa and Latin America. As for Peermont, it has 16 hotel and casino complexes in South Africa, Malawi, and Botswana. The latter is owned by a private equity group, with Mineworkers Investment Company at its lead.
At present Tsogo Sun holds the biggest market share in South Africa’s casino market, with the hotel and casino operator being valued at R27 billion.
