PartyGaming And Bwin In £2 Billion Merger Talks To Create An Internet Gaming Giant

Following the US government’s decision to delay implementing the UIGEA for 6 months, the possibility of the online gaming ban in the US being overturned has become increasingly more likely, and mergers are now becoming seen as an important way that companies could consolidate their positions in the internet gaming market.
Although at an early stage, Gibraltar-based poker giant PartyGaming and Austrian gambling operator Bwin are currently in the process of merger talks which, if realised, would create the biggest internet gambling operation anywhere. “Everyone in the industry is talking to everybody else,” an industry source was quoted as saying recently.
Bwin is valued at £1.2 billion and is particularly strong in sports betting, while PartyGaming is worth around £1 billion and specialises in offering poker and casino games. Any new operation would have an estimated value in excess of £2 billion, could offer the whole range of gambling activities to its customers, and would be well placed to exert considerable control over the currently scattered state of the online gaming market.
 
A merger of the two companies would also be music to the ears of PartyGaming investors, who have seen the value of their shares plummet since the UIGEA was introduced to the US market in 2006, effectively wiping out 90% of the company’s customer base. It would also mean the company would be better able to compete effectively in the US market when it opens for business.
The Panel on Takeovers and Mergers, whose function it is to ‘ensure fair treatment for all shareholders in takeover bids,’ is now expecting to hear from PartyGaming’s CEO Jim Ryan before the market opens tomorrow morning in order to clarify their intentions on the matter.
In the meantime, while the market awaits any announcements, other companies in the gaming industry also considering similar moves include 888 Holdings and Sportingbet, and Sweden’s Unibet.