South Africa gambling merger cancelled.

Sun International has made the abrupt decision to abandon its proposed acquisition of Peermont, a deal amounting to ZAR 7.3 billion (USD 415 million). In an announcement made through the Johannesburg Stock Exchange’s Stock Exchange News Service, Sun International informed shareholders of the termination of the deal. This decision came about due to the South Africa Competition Tribunal setting a hearing date for 2 October 2025, which was after the 15 September deadline set for the completion of the deal. Shareholders had previously given their stamp of approval to the merger in March 2024.

The Competition Commission raised concerns that the merger would lead to a detrimental level of industry concentration, with one particular provision of the Competition Act being pointed out as a cause for concern. Section 14A (1) (b) (iii) of the Competition Act No. 89 of 1998 came into play, suggesting that the combined entity would have had undue influence within the gambling sector. The envisaged merger would have resulted in a significant 92% market share held by only two companies, which raised red flags about the potential stifling of competition.

Should the deal have gone through, it would have drastically altered the landscape of the gambling industry in central Guateng, South Africa. In this region, the number of casino owners would have been reduced from three to two, effectively eliminating healthy competition between the various establishments. Specific concerns were raised regarding the impact on operations such as Emperors Palace, Time Square, Carnival City, and Montecasino, all of which would have been affected by the merger. The Commission expressed fears that the remaining operators could engage in practices to reduce customer benefits and promotions, without any competitive backlash to keep them in check.

Notably, this was not the first attempt by Sun International and Peermont to merge their operations. A similar effort was made back in 2015, but was met with a similar fate due to the negative reception from the Commission. Legal advice for Sun International was provided by Cliffe Dekker Hofmeyr, with Webber Wentzel and Herbert Smith Freehills Kramer offering guidance on the tax and competition law aspects, respectively. On the other hand, Peermont sought advice from Bowman Gilfillan, with financial advisory assistance coming from Rand Merchant Bank.

In a different industry sector, the Competition Commission recently approved a merger involving Refibre and Onepath Investments acquiring dark fibre networks developed by Fibretime Networks – a move driven by a desire to strengthen existing market positions and enhance overall industry capabilities.