888 Purchases Bwin.party in £898m DealPublished July 22, 2015 by Lee R
The new trend in savings and mergers in iGaming continues, as 888Holdings secures a mega deal to purchase Bwin.party for an estimated value of £898m.
888Holdings has taken control of Bwin.party in a cash and stock deal valued at £898m.
The rumored takeover bid has been discussed since mid-May, with Bwin considering competing offers, including an offer from GVC Holdings to Bwin for £908m earlier this month, and a £750m takeover bid from William Hill six months ago.
The deal will go into effect for the start of 2016, and will deliver cost savings to the tune of approximately of $70m (£45m) a year through the end of 2018.
Bwin shareholders retain will 48.9% of the new enlarged group.
Shake-up at the top
Some personnel changes will take place in the new restructuring: Bwin independent non-executive director and audit and risk committee chair Liz Catchpole and Bwin chief financial officer Martin Weigold will join the 888 board as independent non-executive director and a non-executive director, respectively.
Current Bwin chief executive Norbert Teufelberger will not be among the new board members, but will stay on as a consultant.
This is the latest deal in a trending era in iGaming for Mergers and Acquisitions, with firms looking to reorganize and combined assets as well as competitive strengths in order to minimize increasing and fluctuating tax structures across the many emerging federally regulated online gambling markets across the globe.
Mergers also help to reduce costs and increase assets to funnel more investment into in-house exclusive technological development as providers seek maximum technological independence and exclusivity as well.
The recommended deal is the latest in a flurry of M&A activity in the industry, a trend set to continue as firms expand to help offset increasing taxes and tighter regulation and fund higher marketing and technology spend.
Brian Mattingley, Executive Chairman of 888, says: "We believe the deal creates one of the world’s leading online gaming operators.”
Mattingley also pointed his company's expansion priority of increasing scale to absorb unforeseen shifts or fluctuations in the turbulent market that the growing iGaming market represents moving forward.