The Competition Commission has recommended that the Competition Tribunal prohibit Sun International’s acquisition of Peermont Holdings.
In its findings, the Commission stated that the proposed merger is likely to prevent or lesson competition in the casino industry in South Africa and that the merger would significantly change the structure of the national market by reducing the number of national casino operators from three to two i.e., that 92% of casinos in the country would be owned by only two firms and it would remove Emperors Palace (currently owned by Peermont) as an effective competitor to Sun International’s Time Square and Carnival City as well as Tsogo Sun’s Montecasino.
New entry into the casino sector would be unlikely due to the limited availability of casino licenses particularly in central Gauteng.
In addition, the merger would result in Sun International owning and operating casinos located in prime locations which would provide the company with a significant competitive advantage.
In a SENS announcement, Sun International informed shareholders that it would ‘review and evaluate’ the Competition Commission’s recommendation.
The Tribunal will make a final decision on the matter following a public hearing.
