Online casino giants Evolution Gaming and NetEnt recently signed a deal that could affect the entire online gambling industry in the UK and beyond. Evolution Gaming acquired NetEnt for approximately $2.1 billion. A big partnership deal such as this is enough to catch the attention of the UK’s competition watchdogs.
Earlier this week, the UK Competition and Markets Authority (CMA) announced that it was investigating the merger and acquisition process between Evolution Gaming and NetEnt. CMA released a merger inquiry by notice to both parties concerned before inviting comments on the purchase by any representative.
CMA published the details of the investigation yesterday, September 22. Addressing NetEnt and Evolution Gaming, the organization said:
“The Competition and Markets Authority (CMA) is considering whether it is or may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”
To assist NetEnt and Evolution Gaming with this assessment, the CMA invites both companies to comment on the transaction via email until October 5, 2020. All the feedback from the two companies will be considered by the CMA. Afterward, an announcement on whether or not the investigation will proceed to its second phase will be released on or before November 16.
Phase 1 date & Action
16 November 2020 – Deadline for phase 1 decision (*)
22 September to 5 October 2020 – Invitation to comment
22 September 2020 – Launch of merger inquiry
Merger and acquisition details
Under the $2.1-billion deal, Evolution Gaming is offering NetEnt a $9.02 per share, which was approximately 43% premium on the market price of NetEnt when the bid was proposed. During that time, Evolution emphasized that they would not give an offer higher than that.
Prior to CMA’s investigation, the acquisition was supposed to be finalized on November 2. Both Evolution Gaming and NetEnt saw price drops when CMA announced the investigation.