Sun International’s bid to acquire Peermont faces uncertainty as the Competition Commission recommends blocking the deal. The final decision now rests with the Competition Tribunal.
Sun International’s grand plan to buy up Peermont Holdings has hit a speed bump, and that speed bump’s name is the Competition Commission (CompCom). The gaming and resorts giant’s acquisition ambitions are looking less like a sure bet and more like a dicey roll, after CompCom recommended that the deal be blocked. For now, Sun International’s proposal to expand its casino empire is hanging in a precarious balance.
On Friday, Sun International—owners of the iconic Sun City and the bustling Grand West casinos—released a Sens statement confirming the CompCom’s position. The regulator has decided to throw some cold water on Sun’s plans to acquire Peermont Holdings, which owns Emperors Palace in Kempton Park along with a suite of smaller casinos scattered across South Africa. But this isn’t the final spin of the wheel; the ultimate decision now lies in the hands of the Competition Tribunal, which has the power to either approve or reject the deal.
Despite this regulatory hiccup, Sun International’s investors appeared to keep their cool—the company’s share price climbed by almost 1% during afternoon trading following the news. It seems that shareholders aren’t quite ready to fold on the merger just yet, perhaps holding out hope that the Tribunal might see things differently.
Sun International first announced its intention to purchase Peermont back in December 2023. The move was a bold attempt to strengthen its grip on South Africa’s land-based casino market over betting sites in South Africa, potentially boosting its already considerable portfolio of gaming venues. However, such moves inevitably attract scrutiny, especially when market concentration—and the dreaded ‘M’ word (monopoly)—starts getting thrown around. The Competition Commission’s recommendation is based on concerns that allowing this acquisition could result in just that: too much market power in one company’s hands.
In a statement, Sun International noted it had been notified that the Competition Commission had recommended prohibiting the proposed transaction “…in terms of section 14A (1)(b)(iii) of the Competition Act, No. 89 of 1998, as amended.” The reasons for the prohibition haven’t been spelled out in full detail yet, but it’s fair to guess that fears of a monopoly or reduced competition have played a significant part.
Sun International, undeterred, has stated that it will evaluate the Competition Commission’s report once it receives the full details. Until then, it’s up to the Competition Tribunal to decide whether to heed CompCom’s advice or not. As Sun International put it: “In the interim, the Competition Tribunal will begin its review and deliberation of the proposed transaction which it may still approve despite the recommendation made by the Competition Commission.” The stakes couldn’t be higher for Sun, with the Tribunal’s approval being a crucial condition for moving forward.
“Shareholders will be kept apprised of developments in this regard,” added Sun International, assuring investors that they’ll be kept in the loop. It’s corporate speak, but you can almost sense the anticipation behind those words—this acquisition is far from a done deal, but it’s certainly not dead in the water either.
If there’s anyone watching this drama unfold with interest, it’s likely Tsogo Sun Limited, Sun International’s biggest competitor in the South African casino space. Tsogo, another JSE-listed gaming powerhouse, owns the popular Montecasino and Gold Reef City, having snapped up Gold Reef Resorts some years ago. The rivalry between Sun and Tsogo is fierce, and the stakes of this acquisition—if successful—would no doubt shift the balance of power in South Africa’s gambling industry.
For now, it’s a waiting game. The cards are on the table, but it’s up to the Tribunal to decide whether Sun International gets to add Peermont’s properties to its hand. One thing’s for sure—the casino business, with all its risks and rewards, is living up to its reputation as a high-stakes game. Will Sun International hit the jackpot, or will they bust? Only time will tell.
