Chile’s leading gambling operators Dreams S.A. and Enjoy S.A. have decided to come together in a historical merger that would propel the new company on top of all operators in the country. The agreement was officially announced on January 13, and it is still pending approval from regulatory bodies and shareholders.
The number of shares held by shareholders who decide to step out of the new deal cannot go over 9% of Enjoy’s shares, or $12.3 million. This condition alone is prone to postpone the closing date of the merger to the last quarter of the year or to a different date in 2023.
Enjoy, the Only Surviving Entity of the Merger
According to the merger agreement, Enjoy will be the only legal surviving entity, with Dream’s shareholders, Humberto Fisher and Claudio Fischer, receiving around 64% of the newly merged company. At the same time, Enjoy’s shareholders will hold on to the remaining 36% of shares.
The Dreams-Enjoy merger will create a new entity with a stronger capital structure than Enjoy’s current capital while triggering more diversification by penetrating more LatAm markets. Plus, Dreams’ operations would contribute to higher profits and enhanced synergies in the supply chain, amounting to close to 60% of all casinos in the country (15 out of 26). The new company’s operations would also trigger more than 75% of the revenues of the local gaming industry.
The resulting company would this way become the most fantastic casino group on the market and the irrefutable leader in the industry. The merger would also expand the company’s presence in new markets in Uruguay (Enjoy Punta del Este Casino & Resort), Colombia (3 casinos), Peru (8 casinos), Panama (Ocean Casino), and Argentina (Park Hyatt Mendoza Hotel & Casino).
The Merger Could Help the New Company Overcome COVID-19 Challenges
Dream’s board of directors president Claudio Fischer suggested the merger might help the resulting entity better tackle the COVID-19 challenges that have recently affected the company. By bringing together the massive experience of both leading groups in the industry, the merger will also attract the funds needed to handle new challenges that are now part of the LatAm gaming industry. This includes the development of brand new gaming technologies that have emerged in Latin America and the need to successfully implement them in the region.
Together, Enjoy, and Dreams accounted for more than 76% of the total gross revenue of the gambling industry in Chile in 2019, which is the last year recorded prior to the pandemic hitting. The two companies had sent the confidential terms of their merger agreement to the Financial Market Commission (CMF) last October.
Enjoy’s president, Henry Comber, expects the merger to consolidate the leadership of the Chilean company on the LatAm gambling market. Besides the shareholders’ “yes” vote, the merger is still pending approval from the Superintendency of Gambling Casinos of Chile, the CMF, the Chilean National Economic Prosecutor’s Office, and a number of governmental authorities in other states.