A couple of days ago, the UK Competition and Markets Authority issued an initial enforcement order to launch an investigation into The Stars Group Betting and Gaming acquisition.
The competition watchdog has started a probe against the $4.7-billion deal under which the Canadian gaming and online gambling company is to acquire Sky Betting &i; Gaming. On July 10th, The Stars Group officially announced that the deal, which was initially revealed in April this year, had been finalized to form the largest publicly traded online gambling company on a global scale. Only a day later, on July 11th, the Competition and Markets Authority shared that it had started an investigation into the completed acquisition and had served an initial enforcement order issued under Enterprise Act 2002’s section 72(2).
The UK CMA has not revealed any more details regarding the specific concerns associated with the deal. The enforcement order issued by the competition and markets regulatory body said that the watchdog was considering further actions under sections 22 and 33 of the Enterprise Act 2002 which are related to merger and acquisition deals resulting in a substantial decrease of the competition in a certain sector of the economy.
Finalised Merger Raises UK Competition Watchdog’s Concerns
As mentioned above, the deal between The Stars Group and Sky Betting & Gaming ended up with the establishment of the world’s biggest publicly traded online gambling operator. However, the union of the two companies has raised certain concerns about the consequences for rival businesses, as the competition of the combined company could be very hard for them to overcome.
After the initial enforcement order was issued, the Competition and Markets Authority has given instructions to the companies, asking them not to take further action that would result in the integration of the Sky Betting & Gaming’s business into the one of The Stars Group. The CMA also asked the companies to restrain themselves from transferring ownership or control of either company’s business or taking any steps that could harm the ability of either company to remain an independent competitor in the markets in which they both operate.
For the time being, any staff changes and/or transfers, sharing know-how, intellectual property, business secrets and any other commercially-sensitive or confidential information have also been put out of the companies’ reach by the UK competition watchdog. An initial enforcement order has been launched but the CMA is yet to investigate on the acquisition in order to find out whether or not the union of the two companies may result in serious lessening into the competition in the markets in which they both operate.
The competition and markets watchdog shared that it is considering whether a reference under sections 22 or 33 of the Enterprise Act 2002 is necessary.
As a matter of fact, the enforcement order was served by the Competition and Markets Authority on July 6th, but the matter was left unmentioned in the official announcement of The Stars Group in regards to the acquisition deals’ completion.
- Author
Olivia Cole
