Now the time has come. Top slot machine manufacturer NetEnt and Evolution-Gaming, one of the live gaming specialists in the gaming world, are working together. To be more precise: they are merging. After a long investigation, the CMA (Competition and Markets Authority) has now given the go-ahead for the merger.
One of the largest transactions in the online gambling sector had been imminent for months. Evolution Gaming and NetEnt definitely had some hurdles to overcome before the competition authority approved the merger. The CMA, one of the competition and market supervisory authorities in Great Britain, used a detailed procedure to examine whether this could lead to a distortion of competition, i.e. a downsizing of the competitors operating on the British market.
In principle, it is the job of the CMA to ensure an open, fair and competitive market. This also includes preventing the potential development of monopoly positions. In such a case, the takeover procedure would be put to another test. So you can tell that such mergers involve a lot of research from a legal and economic perspective.
Background of the takeover
Evolution Gaming announced a few months ago that it would close the transaction in early November. NetEnt’s shareholders can respond to the takeover offer and, if the regulatory authorities approve the merger, achieve a 43 percent increase. The merger is definitely worth it for the NetEnt shareholders.
NetEnt’s businesses have not followed the positive trend as they used to for a long time. However, COVID-19-related circumstances have led to a slight improvement in its performance for this group. However, Evolution Gaming’s business figures are still showing significantly better operating results.
Even if you compare the market values of the two companies NetEnt and Evolution Gaming with each other, it shows that NetEnt has been slightly in the red lately. Evolution Gaming, on the other hand, posted a price gain of just over 730 percent. The profitability of the gambling groups is therefore very different.
The merger will not only give NetEnt a helping hand, but Evolution Gaming will also benefit from it: The Evolution Gaming portfolio will be significantly expanded, because Evolution Gaming is currently a pure provider of live casino. So there is great hope that NetEnt can be led back into the green profit zone. It will certainly take a while before these effects occur.
One of the main thoughts of the regulators in the merger was to create a live casino monopoly. Let’s take a quick look at past decisions of the CMA: For example, the merger of Ladbrokes and the Gala Coral Group was already approved in 2016. This merger was only possible because both companies made the agreement, a great many their land-based betting shops for sale.
Regulators have now given their final approval to Evolution Gaming’s takeover of NetEnt. The Maltese Competition and Consumer Affairs Authority had already completed their investigations at the end of September and given the green light for the merger. Until recently, the only waiting time was the CMA, which was somewhat more critical of the merger. But that is history now: NetEnt and Evolution Gaming have now received all competition law powers to complete the transaction.
Now it’s NetEnt’s turn
NetEnt’s board of directors has already accepted the merger offer, so there is great hope that the merger will be fully accepted by the end of November. If this is the case, transaction processing can begin as early as the beginning of December. However, NetEnt reserves the right to postpone the acceptance period. However, it is not expected that the Betont shareholders will raise any objections. Not only the shareholders, but also the management board and the administrative board have now approved the merger.
Evolution Gaming launches live craps game
As we mentioned at the beginning, Evolution Gaming is famous for its performance in the live casino. The group soon expanded its portfolio to include a live craps casino game. Allegedly, the game should have new functions that make it easier to use and understand. Among other things, there should even be instructions in the form of a tutorial that explains the process of the game in detail.
With the release of the new craps game, Evolution Gaming’s product range now includes all games that are also available in a land-based casino.