Home » OCW News » December 2009 » Bwin Coy About PartyGaming Merger Rumors

Bwin Coy About PartyGaming Merger Rumors

Date published: 14 December 2009

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After an article appeared in UK paper the Sunday Times implying that top UK online gambling operator, PartyGaming Plc and Austrian online gambling operator Bwin are in merger talks, the share prices of both firms rose by 2.5 percent and 4.1 percent respectively.

However, Bwin seems to be playing the rumours down after it reportedly contacted international new agency Reuters early Monday stating that 'it is not in advanced merger talks with anyone, including PartyGaming Plc, although it does believe there will be more consolidation in the sector.'

The way the 'rumour' sent the share prices of both firms flying indicates how highly regarded online gambling company shares are as the popular internet activity continues to grow in popularity around the world. But while a PartyGaming/Bwin merger may indeed be speculation, expect more mergers.

It's no secret that most large online gambling firms have weathered the global economic crises very well. In fact, many have been busying themselves with symbiotic mergers and acquisitions, PartyGaming and Bwin included. So the billion pound question is when or if the gaming giants will ever merge?

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Consider how Bwin recently acquired Gioco for its online sports betting reach into Europe, including in Italy, or PartyGaming's recent acquisition of Cashcade to enhance its online bingo business. What this means is that on paper both companies would enormously stand to benefit from a merger.

Said a leading UK financial analyst, 'This deal could represent a major advance in the online gambling industry consolidation that has yet to really commence in earnest, despite obvious scale and synergy attractions. We would regard the rumoured Bwin/PartyGaming merger as compelling strategically.'

Commented another analyst, 'Bwin's obvious strength in sports betting means that it would be an ideal partner for PartyGaming But even if there is not a Bwin or PartyGaming merger, there will be further deals. Given PartyGaming's market position and management ambition we still highly rate its shares.'