A Dutch court has ruled that Sega Sammy Holdings must proceed with its €130 million ($147.25 million) acquisition of Stakelogic, a Dutch game developer, rejecting Sega’s attempt to cancel the deal due to regulatory concerns.
This ruling upholds the terms of the July 2024 Share Purchase Agreement (SPA) between Sega Sammy’s subsidiary, Sega Sammy Creation (SSC), and a consortium of Stakelogic’s sellers, including Triple Bells, Bettor Capital, and Oakvale Ventures. The court’s decision emphasizes the importance of proper due diligence in mergers and acquisitions (M&A) and may set a precedent for future corporate deals.
Sega Sammy’s Shift in Position and Legal Dispute Over Regulatory Concerns in Acquisition
Initially, Sega Sammy was enthusiastic about the acquisition, hoping to expand its presence in the iGaming sector. The company anticipated leveraging Stakelogic’s strong foothold in the European market, including its portfolio of online slots and live dealer products.
However, Sega Sammy’s position shifted midway through the deal as it raised concerns about potential regulatory issues. Sega claimed that Stakelogic had violated Japanese and Turkish gambling regulations, arguing these breaches undermined pre-completion obligations and warranted cancellation of the deal. Sega also expressed doubts over Stakelogic’s practices regarding geo-blocking and online gaming in restricted jurisdictions.
Dutch Court Orders Sega Sammy to Complete €130 Million Stakelogic Acquisition Despite Regulatory DisputesThe Amsterdam District Court dismissed most of Sega Sammy’s concerns, ruling that the SPA explicitly prohibited cancellation based on regulatory issues. Judge C.W.D. Bom, who presided over the case, clarified that Sega Sammy could address the alleged violations through monetary compensation, rather than abandoning the deal.
Furthermore, the court questioned the validity of Sega’s claims, pointing out that Stakelogic had been paying for geo-blocking services, making it unlikely that the company would allow its games to be available in restricted markets. The court also noted that Sega Sammy had only accessed demo versions of Stakelogic’s games in these regions, with no evidence suggesting that real-money versions were available.
Court Ruling Confirms Stakelogic’s Limited Liability as a B2B Content Provider in Acquisition
Judge Bom also highlighted that Stakelogic, as a B2B content provider, was not responsible for running the websites that hosted its games. This distinction played a crucial role in the court’s reasoning, as it limited the potential for Stakelogic to face legal repercussions from regulatory breaches, even if the claims against it were valid.
The court emphasized that Stakelogic’s role as a content supplier did not expose it to the same legal risks as operators who run online gambling platforms directly. This further weakened Sega Sammy’s argument for rescinding the deal.
The ruling requires Sega Sammy Holdings to finalize the acquisition within two weeks, under the threat of a €10 million ($11.33 million) penalty for non-compliance. Despite the company’s initial reluctance, the court’s decision paves the way for the deal’s completion, allowing Sega Sammy to proceed with its plans for expansion into the iGaming and digital content markets.
Although the regulatory concerns may still linger, Sega Sammy is now in a position to adapt and move forward, leveraging Stakelogic’s assets to strengthen its presence in the European and global iGaming sectors.