The Austrian gaming equipment maker Novomatic AG has announced that its bid to gain control of Austrian state-owned Casinos Austria AG had failed after being blocked by the country’s competition regulator.
The company had made offers in July 2015 for two equity stakes in Casinos Austria AG.
Novomatic, which already owns 40 percent of Casinos Austria, had partnered with a Czech consortium known as the Sazka Group to take control of the casino operator. The Sazka Group owns more than 11 percent of Casinos Austria.
Novomatic’s chief executive Harald Neumann announced that the company’s bid had not been successful because the Federal Competition Authority (BWB) and the company could not come to a consensus over the terms of the sale. He said that the BWB had asked for numerous changes in order to avoid impacting competition in the industry, which were not acceptable.
In a statement, Harald Neumann said,
“Unfortunately, it has become evident that the BWB, and the experts appointed by the BWB, have adopted a viewpoint that has precluded any solution that would be economically feasible for Novomatic. Most of the requirements called for would not be commercially viable for the Novomatic group and would thwart the positive development of Casinos Austria.”
The competition authority had required Novomatic to make structural changes to its operations in the Czech Republic that included sale of properties. It had also required Casinos Austria to restrict the operations of its video lottery terminals. Novomatic said that these changes would have been economically disadvantageous to both the companies, due to which it could not accept the demands made by the competition authority.
Neumann stated that the company had fought till the end to find a compromise to suit everyone but failed to do so. According to local media reports, BWB has maintained that the changes proposed by it would have been economically feasible.
Casinos Austria is owned partially by the state and is responsible for operating 12 casinos across the country. The Novomatic group operates over 235,000 gaming devices and video lottery terminals across 1,600 outlets globally. The company generated revenue of EUR1.09 billion (US$1.23 billion) for the six months ending June, which was a year-on- year increase of 10.8 percent over last year.
Novomatic has said it would be reviewing the impact of the decision on the group’s future plans for investment into Austria. The company has also stated that it was reserving the right to appeal BWB’s decision.