South Africa: Hotels and casino merger blocked

The deal, which would have resulted in Sun taking over Peermont’s Grand Palm hotel, Mondior, Metcourt Inn and the casinos including the one at Sedibeng hotel in Botswana, had already been given a conditional greenlight in Botswana.

In a recommendation to its tribunal, the Competition Commission of South Africa yesterday blocked the deal saying it will prevent decreasing competition in an already concentrated market.

In South Africa, Sun International had planned to acquire 100 percent of Peermont’s controlling shareholder, investment company Maxshell Group, which owns Emperors Palace, in Gauteng, and Graceland, in Mpumalanga, to unlock new growth opportunities.

However, the commission recommended to the Competition Tribunal that the proposed deal be prohibited on concerns that, if allowed, the merger could give rise to significant competition concerns in the central Gauteng gambling market.

“The gambling industry is significant in the South African economy, with high barriers to entry as it is regulated by the various gambling boards. This merger would have created a highly concentrated market structure in Gauteng, thereby, substantially lessening competition,” acting deputy commissioner, Hardin Ratshisusu said in a statement released yesterday.

Full content: Mmegi Online

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