Sun International, Peermont scupper R7.3bn acquisition due to regulatory delays

Sun International’s R7.3 billion acquisition of Peermont has been terminated after the Competition Tribunal scheduled a long-awaited hearing too late for the deal to legally proceed, while “deal fatigue” had set in among the parties.

In an extraordinary event, the Competition Tribunal had scheduled hearings for the Sun International and Peermont deal to be heard on October 2, 2025. The Competition Tribunal is a condition precedent to the transaction, which currently has a longstop date of September 15, 2025. 

“Accordingly, as the hearing date is after the regulatory longstop date, the parties have mutually agreed to the immediate termination of the Proposed Transaction,” Sun International said.

However, the Competition Commission denied it was the cause of delays in the hearing, and disputes between the parties on discovery evidence had caused delays. The Commission said for instance, that earlier dates for the hearing, such as on 19-30 May 2025, were not utilised due to ongoing discovery disputes between the parties.

On further questions from BR, Sun International CEO Ulrik Bengtsson said  said “deal fatigue” had set in due to the time delay, and considering the impact this was having on both groups, it was one the factors for the termination, aside from the Tribunal being unable to hold the hearings and closing arguments before the long-stop date.

There has been increasing concern expressed about the delays in decision by the competition authorities, particularly the Competition Tribunal, which, for example, most recently faced criticism for deals such as Vodacom's acquisition of Maziv, and Blue Label Telecom’s control of Cell C - the decision in this matter by the Competition Authorities took nine months. The Tribunal has claimed however that 99% of the mergers filed between April and December 2024 were heard within the required timeframe.

Nevertheless, Bengtsson said “multiple approaches” were made to the Tribunal “to bring forward the hearing date and closing arguments prior to the longstop date,” but given the busy workload of the Tribunal, it was not feasible or possible for them to do so. 

Notice of the deal’s termination comes a full 18 months after the acquisition proposal was first announced. The circular to shareholders was first distributed to shareholders on February 5, 2024.

The transaction was first referred to the Competition Tribunal in October, 2024, meaning the hearing would only have taken place 12 months later.

The Tribunal retained the power to approve the deal. This was even though the Competition Commission had recommended to the Tribunal that the transaction be prohibited under sections of the Competition Act, that typically  address risks of reduced competition in the market, and negative impact on public interest, such as job losses, reduced consumer choice, harm to local suppliers, or lack of black economic empowerment.

Peermont operates 11 properties that include hospitality, more than 1 600 hotel rooms, gaming and casino facilities. JSE-listed Sun International operates hospitality and casinos across the country including Sun City, The Table Bay Hotel and Time Square.

Sources said the initial concerns and relevance of the competitive aspects of the transaction appeared to have waned considerably given the rapid growth in online gaming during and since the Covid-19 pandemic.

Sun International’s share price was among the top movers on the JSE on Wednesday, with the price closing 7.2% higher at R47.33, a price that had gained more than 25% since a year ago.

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