South African leisure and entertainment group, Sun International, may turn its attention to Asia after it has completed its plans to consolidate its Latin American operations. The company announced plans to merge its Latin American casino operations with the Latin American casino operator, Dreams which has a solid presence in Chile and Peru to which it recently expanded.
Sun International’s Latin American operations include Monticello in Chile, Ocean Sun Casino in Panama City and a project in Columbia that is close to completion. These will be merged with Dreams, which is a similar size to Sun International. Once the merger has been completed, 50 percent of the combined entity will be held by the current shareholders of each of Dreams and Sun International. According to an agreement, Sun International will then acquire additional shares in the merged entity, resulting in a 55 percent shareholding. The executive team of Dreams will manage the new entity.
There are many steps still to be taken, including transaction documentation, due diligence and approval from the relevant gaming authorities. A provisional closing date has been set for the third quarter of 2015.
Sun International has indicated that once it has completed its expansion activities in Latin America, it plans to turn its attention to the East with the aim of gaining a strategic foothold in the growing gambling market in Asia.
According to Graeme Stephens, CEO of Sun International, the merger in Latin America will create a platform that will enable the company to begin its plan to enter the gaming market in Asia. He noted the many opportunities in the region in what is a growing market. Specifically, he noted that the Philippines, Korea, Japan and Taiwan had gaming markets that were worth keeping track of, although actually entering the market could be difficult.
“We are up against the gaming giants, so we might look at a casino operation as part of a large mixed-use development or take a small piece of a larger casino entity,” he stated.
The company recently released their second half annual results for the period ending December 2014. The group said that besides for Sun City, all of their key properties indicated an increase in profits after they cut costs last year.