888 Holdings PLC has agreed to buy Bwin.Party Digital Entertainment for £898.3 million ($1.4 Billon USD), beating out a rival bid by GVC Holdings/Amaya Gaming for £900 million.
888’s cash offer may not be as high as GVC’s, but the company wishes to focus on potential synergies between the two businesses as opposed to breaking up Bwin.Party. The senior management at both 888 and Bwin.Party appear to be pleased with the deal and look forward to working together.
888’s Executive Chairman Brian Mattingley said, “This is a transformational opportunity for 888 in the consolidating online gaming industry, which is expected to grow significantly over the coming years. The Enlarged Group will benefit from significantly enhanced scale, an improved product offering as well as significant cost and revenue synergies”.
Bwin.party chairman Philip Yea said, “Bringing our two groups together will generate substantial financial synergies for the benefit of both sets of shareholders and create a strong player with the breadth of product, brands and geographic coverage to grow faster than either business would be able to achieve stand-alone”.
The reaction from the online gambling industry is mostly positive, with a number of comments on social media reflecting the excitement that PokerStars will now have a legitimate rival.
Alex Dreyfus of Global Poker Index is delighted to hear about the deal and posted the following via his Facebook page: “Great news, 888 acquires PartyPoker (and Bwin) for $1.4 billion. It will help building a solid no2 in poker and will fuel new poker marketing initiatives, which is critical and needed”.
He added, “Because the operation is not only a debt based financing, it gives a lot of marketing opportunities for 888/PartyPoker. It is even a good news for Poker in US. Good news for Stars too, having a strong challenger will help growing the size of the market, and innovate”.
What remains to be seen is how the two organizations are actually able to integrate once the ball gets rolling.
“With any merger but especially with online gambling the devil is in the detail”, Steve Donoughue of GamblingConsultant.co.uk told CalvinAyre.com. “How easy is it to merge systems and cultures to get the desired synergies and what skeletons are hidden in cupboards?”