Evolution Gaming & NetEnt Under Antitrust Spotlight

By Ben Hamill - September 27 2020
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Evolution Gaming & NetEnt Under Antitrust Spotlight

The CMA, which is short for the U.K.’s Competition and Markets Authority, reportedly on September 22 launched an anti-trust investigation into live casino specialist developer Evolution Gaming’s proposed acquisition of online casino games giant NetEnt. This in order to investigate and address certain concerns over the deal possibly infringing on competition regulations regulating England’s iGaming industry.

The CMA has explained the assessment of the situation as one justified by strong indications of the deal possibly leading to a significant and considerable “lessening” of competition within the local market. 

The organisation has now issued an invite to all relevant parties and stakeholders to provide their comments on the planned $2.2 billion proposition by sending those along to the official inquiry squad by no later than October 5. The submission period will then be followed by a period of consideration of all feedback received, after which the CMA has said it will make an official announcement regarding whether or not the investigation will graduate to a second stage.

Evolution Gaming and NetEnt both saw the respective values of their shares drop immediately following the CMA announcement.

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Final Outcome Postponed

Evolution Gaming earlier this year announced that it proposed to acquire NetEnt at a buying rate of $9.02 per share – which rate represents a 43 per cent premium on the market price of a single NetEnt share (as calculated at the time the offer was first made).

NetEnt immediately welcomed the deal, and its board of directors unanimously advised that shareholders accept its terms by supporting the merger. According to a statement issued earlier this year by NetEnt Chairman Mathias Hedlund, the deal would do wonders in terms of helping the companies in their combined quest for massive North American expansion.

Originally expected to be finalised by November 2, the M&A final outcome will now be postponed as a result of the CMA investigation.

A Joint U.S. Focus

In addition to both companies having posted stellar and above-average results for this year’s Q2, both have also been resolutely focused on major expansion into the U.S.

Evolution Gaming already runs a live dealer live casino studio in the Garden State (New Jersey), and has been approved to open two more – one in Pennsylvania, and another in Michigan State. The live casino behemoth also not too long ago inked an exciting new partnership opposite sportsbook giant BetMGM. According to the terms of the latter, Evolution will henceforth power the bookmaker’s live casino gaming platforms in the U.S.

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