Mergers between major companies are not uncommon, especially in today’s immensely competitive business world, but in certain industries, the process can be extremely lengthy. That’s definitely the case for slot machine maker International Game Technology (IGT), an American-based company attempting to merge with Italian lottery company, GTech SpA. After many months of preparations, IGT is finally ready to seal the deal, pending a vote by its largest shareholders next month.
A meeting has been scheduled for February 10th in which all shareholders will gather to discuss various business related topics, the most important of which being the intended merger with GTech. IGT’s most affluent investors will be given the option to say Yay or Nay to the unifying of the two gaming companies.
WLA reports GTech approval of cross-border merger with IGT
According to a statement from the slot machine maker, the terms of the agreement between IGT and GTech include a throng of conditions that must be met before the fusion can take place. “The merger is subject to certain closing conditions, including the approval of a majority of the outstanding shares of IGT’s common stock and the receipt of required gaming approvals.”
Assuming that the majority of stockholders vote in favor of conflation, several things will occur upon the merge, starting with a rebranding of the company. IGT and GTech will combine into a single entity to be known as Georgia Worldwide, Plc., established as a holding company under the governing eye of England and Wales.
Additionally, the new UK holding giant’s regular shares will be listed on the New York Stock Exchange. The company statement said the NYSE listing is intended “to further increase the visibility of the combined group.”
Shareholders at GTech SpA already held their meeting on the subject, approving the buyout of the slot machine maker back in November of last year. February’s meeting of IGT members is sure to bring the same result, but sources anticipate completion of the merger to occur a bit further down the road, sometime before the first half of 2015 is out.
Due to the nature of the gaming industry and the international presence of the involved companies, spanning three nations, regulatory issues have extended the overall process to about one year. Regulators in each jurisdiction must review each entity and approve the merger.
It was first reported in a Reuters exclusive that International Game Technology was seeking a buyer in June, 2014. A group of unnamed associates of the Las Vegas-based slot machine maker leaked the information that IGT had consigned Morgan Stanley to explore sale options. That ‘incidental’ leak led to the company’s stocks soaring 14.4% in a single day, swelling their worth from $3 billion to $3.5 billion.
In the last two years, a host of acquisitions involving members of the gaming industry took place, but none quite so lucrative as the pending merger of IGT and GTech. Bally Technologies bought out SHFL Entertainment for $1.3 billion, Scientific Games procured slot machine maker WMS Industries for $1.5 billion, and Amaya Gaming purchased Rational Group (parent of online poker giants PokerStars and Full Tilt) for a whopping $4.9 billion. If this new deal goes down, however, the total cost is listed at $6.4 billion to GTech.
The Italian lottery company first publicized its intentions to acquire IGT back in July on 2014, posting the $6.4 billion price tag. That total includes $4.7 billion in cash and stock, along with the assumption of IGT’s current $1.7 billion debt.