Sega Sammy agreed to buy GAN for approximately $107.6m (£86.7m/€104.3) in November 2023. The deal states Sega Sammy will pay $1.97 for each share in the online gambling solutions provider.
Initially, it was hoped the purchase would be finalised before the end of 2024. However, this completion is now not likely to occur until Q2 of the current calendar year, with the ‘end date’ amendment allowing for additional time.
The amendment, announced on Friday (7 February), pushes the end date of the merger to 31 May. This had most recently been set at 7 February.
Additional time for regulatory approvals
The end date is when a non-breaching party can elect to terminate the agreement by notice to the other party, if the closing has not yet occurred. Extending this, both parties say, allows for additional time to secure necessary approvals from regulatory authorities.
GAN and Sega Sammy have already secured several key approvals for the deal. These include the green light from the Nevada Gaming Commission in October after an initial approval from the Nevada Gaming Control Board in September.
Apart from this, the terms of the merger are unchanged. Subject to other customary closing conditions, GAN and Sega Sammy expect to complete the deal by the end of June.
“The parties continue to respond to regulatory requests,” GAN chief executive Seamus McGill said. “This process takes time, but we are making great progress and working with Sega Sammy in anticipation of a successful closing.”
Sega Sammy eyeing North America growth
The agreement will actually see GAN merge with one of Sega Sammy’s subsidiaries. GAN will join together with Sega Sammy Creation (SSC), which primarily focuses on land-based casino operators.
Upon completion, GAN will cease to be a publicly traded company. All ordinary shares will be delisted from the Nasdaq Capital Market and deregistered.
When it first announced the deal, Sega Sammy highlighted the potential for growth in the US as one of the driving factors for the deal.
At the same time, McGill, then interim CEO of GAN, spoke about the company’s own struggles in North America, adding that combining with Sega Sammy would help it grow in the region.
“Market share concentration in the US B2C space, a slower than expected adoption of regulated online gaming in the US, along with changes to key customer contracts make the near-term operating environment challenging without ample capital resources,” McGill said.
“Sega Sammy has those resources. GAN is a strategic complement to their existing gaming portfolio. We believe this all-cash offer, at a substantial premium to recent trading prices, is the value-maximising path for our shareholders.”
Incidentally, GAN is not the only new business of interest for Sega Sammy. In July last year, it also purchased online game creator Stakelogic for $143.2m.
Original article: https://igamingbusiness.com/strategy/ma/gan-sega-sammy-merger-end-date-extended/
