Austria-based gaming equipment maker Novomatic AG said its attempt to increase its stake in Casinos Austria AG has failed after that country’s authorities blocked the deal, citing competition concerns.
“Despite months of negotiations with the Federal Competition Authority (BWB), Novomatic could not come to a consensus over the requirements to acquire part of Casinos Austria,” said Novomatic in a press release on Thursday.
Novomatic claimed that despite making a number of concessions, the competition authority “denied the merger because it would allegedly restrict competition”.
“Unfortunately, it has become evident that the BWB, and the experts appointed by the BWB, have adopted a viewpoint that has precluded any solution that would be economically feasible for Novomatic,” said the firm’s chief executive, Harald Neumann, in a statement.
“Most of the requirements called for would not be commercially viable for the Novomatic group and would thwart the positive development of Casinos Austria,” he added.
Local media said the competition authority stated its proposed conditions would have been economically feasible.
In July 2015, privately-held Novomatic made binding offers for two equity stakes in Casinos Austria. Novomatic had secured a nearly 40-percent stake in Casinos Austria and planned to take over control jointly with a Czech consortium that has more than 11 percent of Casinos Austria.
Novomatic in February announced a “long-term strategic partnership” with Sazka Group a.s., under which the firms would pool their respective – already acquired or to be acquired – shares in Casinos Austria and Austrian Lotteries.
Partially state-owned Casinos Austria, founded in 1967, is the operator of Austria’s 12 casinos according to its official website.
Worldwide, the Novomatic group operates more than 235,000 gaming devices and video lottery terminals in more than 1,600 outlets, including gaming parlours and casinos.
Novomatic said the competition authority required the firm to make structural changes to its business regarding casinos operated by the group in the Czech Republic. Such measures “even included selling some locations”, said the company. “By the same token, the video lottery terminals operated by the Casinos Austria group would have been subject to restrictions, bringing significant economic disadvantages to both companies,” added Novomatic.
Mr Neumann said: “Until the last moment, we fought for a solution that would have been viable for everyone concerned. In order to avert substantial economic disadvantages for the company, we could not accept the requirements demanded of us.”
Novomatic said it would strategically re-evaluate the decision in terms of its impact regarding the group’s future investments in Austria. It added it reserved the right to appeal against the decision.
In August the gaming manufacturer and operator reported a turnover of EUR1.09 billion (US$1.23 billion) for the six months to June 30, up by 10.8 percent from the prior-year period.
Jan 15, 2021Recent advisory notices issued by a number of local authorities in mainland China, calling on residents not to travel during the February Chinese New Year (CNY) break, further clouds the prospects...
Jan 15, 2021
“We expect Las Vegas Sands to not have any material change in strategy. The focus remains developing Macau and Singapore”
Vitaly Umansky, Kelsey Zhu and Tianjiao Yu
Analysts at brokerage Sanford C. Bernstein