GAN Limited, a prominent B2B technology supplier of real money internet gaming and a major player in international online sports betting, has updated the timeline for its merger with Sega Sammy Creation Inc. (SSC), a subsidiary of Sega Sammy Holdings. Originally slated to conclude by February 7, 2025, the merger deadline has now been extended to May 31, 2025. This extension gives both companies the necessary time to secure pending regulatory approvals, primarily from gaming authorities.
GAN and Sega Sammy adjust merger timeline for regulatory approvals:
This adjustment comes after the companies recognized the need for additional time to fulfill the requirements from the relevant gaming regulators. Despite the change in the timeline, the terms of the merger agreement remain unaltered. The merger is still expected to proceed in the second quarter of 2025, contingent upon the usual closing conditions being met.
According to Seamus McGill, CEO of GAN, “The parties continue to respond to regulatory requests. This process takes time, but we are making great progress and working with SEGA SAMMY in anticipation of a successful closing.” McGill’s statement highlights the complex nature of regulatory approvals in the gaming sector, but he expressed confidence that both parties are well on track to finalize the merger.
Sega Sammy, a significant force in the gaming industry, agreed in November 2023 to acquire GAN for a total of approximately $107.6 million. As part of the deal, Sega Sammy agreed to pay $1.97 per share for each of GAN’s ordinary shares. The original expectation was that the merger would close by the end of 2024, but the required regulatory clearances have caused delays, necessitating the extension of the merger’s finalization date to May 31, 2025.
The extended timeline now provides additional time for both companies to complete the necessary approval processes. Notably, the deal has already received important green lights, including approvals from the Nevada Gaming Commission in October 2024, following an earlier nod from the Nevada Gaming Control Board.
What the merger means for GAN and its shareholders:
Once finalized, the merger will result in GAN’s transformation from a publicly traded company to a privately held entity. All outstanding GAN ordinary shares will be canceled and converted into the right to receive cash payments of $1.97 per share, subject to applicable withholding taxes. As part of this transition, GAN will be delisted from The Nasdaq Capital Market and deregistered under the Securities Exchange Act of 1934.
This move to privatization follows a period of challenges for GAN in North America, as indicated by McGill in previous comments. “Market share concentration in the US B2C space, a slower than expected adoption of regulated online gaming in the US, along with changes to key customer contracts, make the near-term operating environment challenging without ample capital resources,” McGill stated in the company’s press release. Sega Sammy’s deep financial resources are expected to alleviate these challenges, allowing GAN to leverage new opportunities, particularly in the U.S. market.
The strategic rationale behind Sega Sammy’s acquisition of GAN stems from the potential to expand its footprint in North America, a key growth area for both companies. By merging with GAN, Sega Sammy hopes to enhance its portfolio of gaming products and services, tapping into a rapidly evolving market for online and land-based gaming.
Both GAN and Sega Sammy have emphasized that the delay is due to the intricate nature of securing regulatory approvals. As McGill noted, “This process takes time,” signaling that the companies are committed to working through any remaining regulatory hurdles. Both parties remain confident that with the extra time granted by the extension, they will be able to address any outstanding concerns and complete the deal in the second quarter of 2025.
Sega Sammy’s focus on expanding its operations in North America through acquisitions is not limited to GAN. Last July, Sega Sammy also acquired online game developer Stakelogic for $143.2 million, further underscoring its ambition to grow its presence in the global gaming market. The merger with GAN will add another significant dimension to its portfolio, as the company looks to leverage the potential of online gambling and sports betting, particularly in the U.S. market.
