Tsogo Sun and Gold Reef Resorts merger approved

Tsogo Sun and Gold Reef, however, argued that competition would not be lessened by the merger and so it was not necessary to divest from Silverstar. According to the Commission, while the merger presented no significant concerns in the rest of South Africa, the merger would lessen competition within the Gauteng casino market.

 The Commission alleged that Silverstar, in particular, offered a competitive alternative to Montecasino and the merger would lead to the elimination of Silverstar as a competitor. They submitted that, in the absence of effective competition, this would give to the new merged entity an incentive to raise prices or degrade its product offering. Therefore they recommended that the Tribunal approve the merger between Tsogo Sun and Gold Reef Resorts on condition that Tsogo Sun sell off Silverstar Casino.

The merging parties, however, were of the view that casinos drew customers from their own local catchment areas and therefore didn’t compete with each other. Accordingly the merging parties did not believe the merger would result in a lessening of competition and they opposed the proposed divestiture of Silverstar.

 Tsogo Sun and Gold Reef Resorts are both national casino operators and through this transaction Tsogo Sun will acquire Gold Reef Resorts. Tsogo Sun is involved in the hotel and gaming markets and has various casinos located all around the country including Montecasino in Johannesburg, Gauteng. Gold Reef Resorts also has various interests in the casino gaming industry in South Africa. In Gauteng, Gold Reef Resorts owns Gold Reef City and Silverstar Casino located in Johannesburg South and Krugersdorp respectively.