Dreams and Sun International have finalised the merger between both companies creating Latin America’s largest gaming operator.
The transaction is subject to approval of the competent authorities, both in Chile and in South Africa. If approved the merger will create a group valued at around US$400m.
The Latin American operations of Sun International, including Monticello in Chile, Ocean Sun Casino in Panama City and a project near completion in Colombia, will be merged in the deal which will see Sun International expanding its presence in the region. Dreams operates six casinos in Chile and it has recently expanded into Peru where it operates four smaller gaming establishments in Lima and has plans to expand further in the region.
Sun International will own 55 per cent of the merged entity. This means that once the merger goes into effect it will operate over 6,000 slot machines, 530 hotel rooms and 295 gaming tables in Chile, Panama, Peru and Colombia.
Sun’s CEO Graeme Stephens said that the company had been looking for the right partner for many years in Latin America and said that Dreams fitted the bill perfectly: “Operationally it has a strong presence in Chile, which is a country that we know well and that we have confidence in, it also has an expansion strategy that has seen it grow a presence in Peru, which is complementary to our own expansion into Panama and Colombia. Most importantly we place a high value on their executive team and on having local shareholders, in particular the Fischer family who have been in the industry for more than a decade. We believe with this team we are well positioned for future expansion.”
According to current plans the new company will be floated on Chilean stock exchange or other stock exchange within the next two years. This is so that the sale of a 45 per cent holding of Dreams, which is held by Entretenimientos del Sur Limitada, (a private equity firm controlled by Citigroup) can be finalised first. Chilean entrepreneurs Claudio and Humberto Fischer will remain shareholders of the merged company. Following approval of the transaction by regulators, Dreams and Sun will initially share the ownership of the resulting company equally. Subsequently Sun will attain 55 per cent of the company.
Dream’s CEO Jaime Wilhelm said: “Sun International is the best partner for us to achieve a major goal, to be regional leaders in the casino industry. We are committed to making this a turning point in the entertainment industry. The combination of Dreams and Sun Latin America is an important step to create stronger companies within the regional gaming industry in order to further enhance industry standards and improve sustainability.”
News of the merger first emerged in February when the companies announced that they had entered into a memorandum of understanding to merge their Latin American operations as part of Sun’s International plans to expand into the Latin American gaming market.