February 18, 2010 / 8:57 AM / 9 years ago

Gold Reef to merge with Tsogo

JOHANNESBURG (Reuters) - South African gaming and hotels group Gold Reef Resorts GDFJ.J will merge with SABMiller’s SAB.L Tsogo Sun unit, creating one of the biggest listed gaming groups in Europe, the Middle East and Africa.

The companies said on Thursday the transaction will involve Gold Reef acquiring Tsogo’s entire issued share capital to be funded by the issue of new Gold Reef shares. Brewing giant SABMiller said it will exchange its 49 percent stake in Tsogo Sun for a 39.7 percent holding in the new group, which will remain listed on the Johannesburg bourse. “The merger will create not only a premier gaming and hotels company in South Africa but a business of significant scale ranking amongst the largest listed gaming groups in the EMEA area,” SABMiller said in a statement. Shares in Gold Reef, which operates casinos such as Silverstar and Queens Casino, fell 4.54 percent to 19.76 rand by 8:48 a.m. British time.

SABMiller said it will benefit from the diversification of the enlarged company’s earnings and market segments.

Gold Reef said its shareholders will now have access to Tsogo Sun’s portfolio of assets.

“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,” Gold Reef Chief Executive Officer Steven Joffe said in a statement.

Reporting by Marius Bosch

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