Is Evolution Gaming swallowing up NetEnt?
The gambling industry has had major takeovers and mergers not lacking in recent years. And now another “big deal” seems to be in the offing. Accordingly, the well-known live provider Evolution Gaming is keen to take over its Swedish competitor NetEnt. The resulting company could become one of the world market leaders. And that's obviously what Evolution Gaming is aiming for.
US market with important role
Evolution Gaming and NetEnt are two gaming industry development giants. Both groups are popular with players all over the world with their offers and act as partners to numerous online casinos. In the future, a new giant could possibly emerge from both groups. As Evolution Gaming announced, they would like to merge with NetEnt or take over the Swedish development team. A correspondingoffer of around two billion euros should be available to NetEnt. If the Swiss agree, one of the most successful gambling companies of the time would emerge in one fell swoop. Incidentally, the new group would probably also be the largest B2B provider on the online gaming market. And the industry has also gained a real sensation.
According to Evolution, the primary objective of the takeover isto be able to strengthen the position on the US market. The US gaming industry is considered an important market, also for European companies. Not only because of its potential size, but also because of strong developments and growing sales. The developer also states that the amount of the offer clearly shows that they want to become the global market leader in online gambling.
NetEnt not averse to the offer
There has already been a first reaction from the Swedes. NetEnt CEO Mathias Hedlund saidthat they welcome Evolution Gaming's plans. Both companies would do strong work in their fields. NetEnt especially in online slots, Evolution Gaming especially in the live dealer area. A combination of both offers could therefore lead to great success and a strong impact on expanding markets - just like in the USA. Hedlund, who recommended that NetEnt shareholders vote in favor of the deal, also sees another advantage in the potential savings. According to the chairman, costs of around 30 million euros could be saved each year.
Since both companies are listed on the stock exchange, effects were immediately apparent after the offer became known.However, Evolution's investors seem cautious. The morning after the announcement, the company's share price fell 9.64 percent. NetEnt's shares have meanwhile risen by more than 26 percent on the Stockholm Stock Exchange. NetEnt shareholders should now be presented with the opportunity to convert their NetEnt shares into Evolution Gaming shares in the near future. It is said to do so at a price of SEK 79.93 per share, a real bargain price that is almost 43 percent below the pre-offer stock market price.
The trend is towards a deal
Not only the statements by Hedlund show that the trend in this case is more towards a deal. Fittingly, according to Evolution Gaming, some NetEnt shareholders have already signaled that they will accept the offer.In addition, the board of directors has recommended that all shareholders accept the offer. According to the announcement, the deal between the two companies should ideally be completed in early November. That should then also be the starting signal for the major attack on the US market. Evolution Gaming would primarily benefit from NetEnt's powerful position in the USA and could offer its live games via its connection points. NetEnt has been able to develop a good position in the USA over the last two years. The group was one of the first European developers to supply the gaming groups in the USA with software and ideas.
Success in the USA stands or falls with developments in online gambling. In general, regulation is left to the individual states, so that they can give the green light individually. But:So far, the majority of the market is still in the stationary sector – around 90 percent. They are mainly distributed among the numerous gambling resorts in Las Vegas or Atlantic City, but also in countless Indian casinos throughout the country. However, this also means that the potential for the online industry in the USA is huge. Both companies have recognized this. As stated in the statement by Evolution Gaming, they also want to use their new position in the USA to significantly advance the digitization of the gaming industry.
Are the states opening up their markets?
While sports betting has already been legalized online in numerous states, the authorities are having a much harder time with online casinos. When exactly a large-scale opening is to be expected here can hardly be predicted.However, the Corona crisis should encourage some states to rethink. The casino closures have also led to losses in the municipal coffers in many places. The industry is still recovering only slowly. Strong tax revenues or other levies are not to be expected from the industry this year. This could also lead to a slightly different attitude towards the regulation and legalization of online casinos in the future.