It seems that UK gambling giant The Rank Group is looking to a bigger piece of the online gambling pie as the company is in merger talks with online operator 888 Holdings, the Sunday Times reported earlier today.
According to industry sources, the two companies are entering the final stages of consolidation discussions and an announcement is likely to be made on Monday, July 25.
If the two companies indeed enter into an agreement, they will form a £2-billion gambling powerhouse with online and land-based operations across multiple regulated markets. Although the potential deal was labeled a merger by sources, it is yet to be understood how exactly the transaction will be structured.
The Rank Group is probably best known for owning Grosvenor Casinos, UK’s largest chain of land-based gambling venues. The brand also operates two casinos in Belgium and has a rapidly growing online division. Mecca Bingo and Spain-facing Enracha are the other two brands to be owned by the UK gambling giant.
As for 888 Holdings, the Gibraltar-based company operates several online gambling websites, with those being available across multiple jurisdictions, including New Jersey, Nevada, and Delaware, the only three US states where Internet gambling is legal.
Last summer, 888 Holdings was one of the involved parties in a months-long bidding war for fellow online gaming operator bwin.party. However, rival GVC Holdings emerged as the winning bidder and eventually bought the company for £1.1 billion. The acquisition deal was completed in February 2016.
It seems that 888 Holdings has been looking for a powerful partner to join forces with in the highly competitive gambling market for quite some time now. Late in 2006, the company announced that it was discussing a potential merger with Ladbrokes. However, the deal fell apart due to concerns related to the implementation of the Unlawful Internet Gambling Enforcement Act in the US and changes in the UK tax system.
If The Rank Group and 888 Holdings agree on a merger deal, it would be the first one of this scale to be announced in 2016. And as it seems summer seems to be gambling operators’ favorite season for discussing big-scale mergers and acquisitions within the industry as this time last year two other pairs of gambling giants – Paddy Power/Betfair and Ladbrokes/Gala Coral, announced that they would join forces to secure better performance within the highly competitive market.
Paddy Power and Betfair completed their merger in February to create a £6-billion combined entity. As for Ladbrokes and Gala Coral, they are to be officially joined into Ladbrokes Coral any time now.
