Operator News
Chile – Dreams and Enjoy pull the plug on merger after Prosecutor’s investigation
By Phil - 14 April 2023
Latin American casino powerhouses Dreams and Enjoy have scrapped their ambitious plans to merge with both companies stating to Chile’s Financial Markets Commission that ‘the process is to be abandoned.’
Dreams stated: “The parties have agreed to terminate the merger agreement in accordance with its stipulations and not to continue with the operation.”
Enjoy added: “The parties have agreed not to persevere in the business combination and, by mutual agreement, have terminated the Merger Agreement. At this date it is not possible to determine the effects that the information may have on the assets, liabilities or results of Enjoy. The closing of the merger was subject to the fulfillment of a number of conditions, the last of which was to be met on or before July 13, 2023.”
It added: “After 48 years of operation in the market, Enjoy works with full conviction to become a relevant player in its business in Latin America. In this context, a special focus will be on the online business already launched in Brazil and regarding which it expects a prompt discussion and approval of the law to allow it to be offered in Chile.”
The decision to abort the merger comes as the casino sector in Chile is facing up to extra scrutiny with the National Economic Prosecutor’s Office opening an investigation into collusion into the bidding processes for several casinos in Chile, including Marina del Sol. This saw the FNE raid the homes of the President of Marina del Sol, Nicolás Imschenetzky, the President of Enjoy, Henry Comber, the General Manager of
Dreams, Jaime Wilhelm, and the now former manager of the Chilean Association of Casinos de Juegos (ACCJ), Rodrigo Guíñez, to take phones. computers and electronic devices, as it looked to prove alleged coercion and coordination in the casino tenders.
Dreams would have held a majority shareholding in the combined group of 64 per cent with the merger uniting 58 per cent of the land-based casino licences in Chile and 76 per cent of Chile’s GGR from 2019.
The merger had faced issues from the competition authority in Chile who had raised concerns over the merged entity taking full ownership of Chile’s municipal casinos. The casino groups tried to appease the Commission for the Financial Market with an offer to offload the Enjoy Santiago casino.
It was hoped that offloading the Rinconada casino would reduce the company’s position in the Santiago metropolitan region and would be enough to satisfy the FNE.
In June 2022, the FNE announced it had put the merger on hold in order to investigate its effects on the market that it would need a further 90 days to investigate and analyze the merger. The FNE said that the investigation had begun on May 3 2022 after initially finding that the merger could possibly reduce competition in the market and have a negative effect on consumers as well as other casino operators.
In November Dreams and Enjoy sent a note to the FNE defending the merger. In January 2022 Enjoy S.A and Dreams S.A – the two largest casino operators in Chile – announced that they had finalised their agreement to merge the two companies. However a fifth mitigation proposal failed to make any progress.
