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THEE - The Competition Commission - Competition Tribunal approves casino

Release Date: 11/02/2011 12:00
Code(s): JSE
Wrap Text

THEE - The Competition Commission - Competition Tribunal approves casino merger unconditionally COMPETITION TRIBUNAL APPROVES CASINO MERGER UNCONDITIONALLY (Following is a guideline for journalists. The information can be used but please do not quote Nandi Mokoena or the Tribunal) Today the Competition Tribunal unconditionally approved the proposed merger between Tsogo Sun and Gold Reef Resorts. This decision follows an 8-day hearing in which the Competition Commission recommended the approval of this merger subject to the condition that the merged entity sell-off Silverstar Casino in order to maintain competition in the Gauteng casino gaming market. Tsogo Sun and Gold Reef, however, argued that competition would not be lessened by the merger and so it was not necessary to divest from Silverstar. Background Tsogo Sun and Gold Reef Resorts are both national casino operators and through this transaction Tsogo Sun will acquire Gold Reef Resorts. Tsogo Sun is involved in the hotel and gaming markets and has various casinos located all around the country including Montecasino in Johannesburg, Gauteng. Gold Reef Resorts also has various interests in the casino gaming industry in South Africa. In Gauteng, Gold Reef Resorts owns Gold Reef City and Silverstar Casino located in Johannesburg South and Krugersdorp respectively. The Commission assessed the merger in order to determine if it would substantially lessen competition in the casino gaming market, if approved. According to the Commission, while the merger presented no significant concerns in the rest of South Africa, the merger would lessen competition within the Gauteng casino market. The Commission alleged that Silverstar, in particular, offered a competitive alternative to Montecasino and the merger would lead to the elimination of Silverstar as a competitor. The Commission submitted that, in the absence of effective competition, this would give the new merged entity an incentive to raise prices or degrade its product offering after the merger. The Commission therefore recommended that the Tribunal approve the merger between Tsogo Sun and Gold Reef Resorts on condition that Tsogo Sun sell off Silverstar Casino. The merging parties, however, were of the view that casinos drew customers from their own local catchment areas and therefore didn`t compete with each other. Accordingly the merging parties did not believe the merger would result in a lessening of competition and they opposed the proposed divestiture of Silverstar. During the course of the hearing, which took place over 8 days from 6 December to 9 February, the Tribunal heard evidence from witnesses from the Commission, the merging parties, rival casino companies and economic experts. Having considered these arguments, the Tribunal decided to approve the merger without any conditions. In order to allow the merging parties to meet certain commercial deadlines, the Tribunal issued its decision in this case earlier today. At a later stage the Tribunal will provide reasons for its finding. Issued By: Nandi Mokoena PR Consultant: Competition Tribunal Cell: +27 (0) 82 399 1328 E-mail: NandisileM@live.co.za On Behalf Of: Lerato Motaung Registrar: Competition Tribunal Tel: (012) 394 3355 Cell: +27 (0) 82 556 3221 E-Mail: LeratoM@comptrib.co.za Date: 11/02/2011 12:00:09 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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