Tsogo Sun agrees Gold Reef merger

In South Africa, Tsogo Sun Holdings Limited has agreed to merge with local competitor Gold Reef Resorts Limited to create a hotel and gaming firm worth over $2.7 billion.

Tsogo Sun is owned by giant brewer SABMiller and formed a joint venture in September with Gibraltar-based online gaming operator 888 Holdings’ Dragonfish business-to-business subsidiary to offer an Internet sportsbook while agreeing to possibly move into casino, poker and bingo at a later date.

London-listed SABMiller stated that the all-share transaction would create ‘a business of significant scale, ranking among the largest listed gaming’ companies in Europe, the Middle East and Asia. The deal will see the firm behind the Grolsch and Peroni brands acquire a 39.7 percent stake in the enlarged company in exchange for Gold Reef acquiring 49 percent of Tsogo Sun.

“This transaction heralds the creation of a significant entity in the gaming and hotel industry and in corporate South Africa,” said Jabu Mabuza, Chief Executive Officer for Tsogo Sun.

“The merger of two quality portfolios and listing on the JSE provides investors with exposure to diversified markets and geographies. We will look to capitalise on the new growth opportunities that this merger brings.”

“This merger gives Gold Reef shareholders direct access to Tsogo Sun's attractive portfolio of assets,” said Steven Joffe, Chief Executive Officer for Gold Reef.

“It creates a company of significant scale and diversification across geographies and markets. As a larger and stronger company, we will be well positioned to pursue attractive growth opportunities in new markets.

“We believe this transaction is a great outcome for our shareholders to participate in a larger and more diversified group. It opens up a number of growth opportunities as well as improves access to capital and new talent. It is a win-win outcome for all concerned.”