PartyGaming and Bwin Announce Merger Details

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Ever since the merger between PartyGaming and Bwin was announced it was known that the combined entity would be the world's largest publicly listed online gaming company. Now, through a press release from its present headquarters in Vienna Bwin has announced the more significant details of the merger.

The new company will operate under the name of bwin.party digital entertainment plc. Bwin, through its current shareholders will hold 51.7% of the new company and PartyGaming will hold 48.3%. Norbert Teufelberger, Co-CEO of Bwin, said that their products and target markets complement one another perfectly, and they can continue to expand their technology leadership in all online gaming product segments such as sports betting, poker, casino, bingo and games. What this means for the present players at both the web sites is that the PartyGaming and Bwin brands will be retained and function independently as they are presently doing. Players will not be required to make any adjustments.

The combined entity bwin.party will have its headquarters in Gibraltar and be listed on the London Stock Exchange. Currently PartyGaming also operates from Gibraltar. However, the Bwin brand will continue to operate from Austria. Teufelberger and Jim Ryan, PartyGaming's current CEO, will head the company as Co-CEOs. The merged operator will continue to focus on B2C products, an area in which it enjoys considerable strength. However, because of the financial muscle gained through the merger the company will make inroads into B2B and B2G businesses. Teufelberger elucidated, "Our many years of online know-how, healthy balance sheet, and one of the largest pools of poker liquidity in any regulated market will make us an attractive business partner." The annual synergies resulting from this merger are expected to be around €55 million. The savings should start accruing from the year 2012 and the full effect will be felt from the year 2013.

The steps involved to bring fruition to the merger were also outlined. The Executive Board of Bwin will convene an Extraordinary General Meeting on January 28, 2011. In this meeting the shareholders are expected to approve the merger. Assuming this goes through the merger is expected to be legally effective by the end of the first quarter of 2011. Existing Bwin shareholders will be given 12.23 PartyGaming shares for each Bwin share. Bwin shareholders not interested in the merged company can sell their shares on the Vienna Stock Exchange before the merger or can exercise their entitlement to a cash settlement. The amount of the cash settlement has been set at €23.52.

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