South Africa gaming and leisure giant Sun International Ltd. has agreed to pay R675 million ($42.8 million) to fellow hotel and casino operator Peermont Global after talks to acquire the closely held company breaks down.
Bloomberg reported that both gaming firms abandoned the deal after South Africa’s Competition Commission objected Sun’s plan to buy Peermont for R9.4 billion ($595.76 million).
Sun International has 26 resorts across Africa and the Americas, where it has a complex near Santiago and a casino in Panama. Peermont is owned by a private equity group led by the Mineworkers Investment Company and has 16 hotels across South Africa, Botswana and Malawi.
The gaming and leisure giant has earlier agreed to pay Peermont some R900 million ($57.15 million) if the deal breaks down and a new complex at Menlyn Maine, in the South African capital of Pretoria, has started operations. On Wednesday, Sun said it has already reached a settlement with Peermont in order to save the project, which is already at an advanced stage of construction.
Sun, founded by South African hotel magnate Sol Kerzner, earlier planned to add resorts such as the Emperor’s Place in Johannesburg and resolve the dispute over the Menlyn Maine complex should the deal with Peermont goes smoothly.
But the country’s antitrust agency questioned the effect that the Peermont’s acquisition will have on the gambling market in Gauteng, South Africa’s richest province.
The Competition Tribunal had set the hearing of the Peermont acquisition in June, according to Sun International.
Cracks in the business relationship between Sun and Peermont began to grow after the latter changed its mind on the construction in Menlyn Maine. As a legal remedy, Peermont has elevated the issue to the High Tribunal before the two companies inked the deal.