The stock price of Evolution Gaming has significantly dropped following the announcement of a potential acquisition of NetEnt

Evolution Gaming has submitted a bid to acquire NetEnt, a move aimed at strengthening its position in the American market. The proposed deal is valued at $2 billion, with Evolution making an ambitious statement about its intention to become "the global leader in the online gaming industry."
The acquisition proposal has already received approval from NetEnt's chairman, Mathias Hedlund. He noted that combining his team's successful online slots with Evolution's live casino products would provide the company with greater leverage in expanding markets like North America.
The offered price of $8.58 per share represents a 43% premium over NetEnt's closing stock price on the Nasdaq Stockholm exchange on Tuesday. Compared to the volume-weighted average price of NetEnt shares over the past 30 trading days, the premium reaches 72%.
Evolution has reported that shareholders holding approximately 20% of NetEnt's shares have already expressed their willingness to accept the offer. The board of directors has also unanimously recommended that other shareholders support the proposal. Board members, who collectively control 8.48% of the shares and 23.20% of all votes in NetEnt, have indicated their intention to agree to the deal.
The merger is expected to result in annual cost savings, estimated at around €30 million compared to the combined expenses of NetEnt and Evolution for the first quarter of 2020. Evolution stated that it plans to publish the offer document around August 14, with the acceptance period set to close on October 26. The deal is anticipated to be finalized by November 2.
"This strategic transaction marks a significant step towards Evolution's long-term plan to become the global leader in the online casino market," said Jens von Bahr, chairman of Evolution. He added that this merger would create a best-in-class B2B provider, capable of driving the global shift of the gambling industry online, as currently, 90% of the market consists of land-based casinos.
Both companies believe that the American market has the potential to become the largest, as each state establishes its own regulations. The combined revenue for the first quarter was $187.6 million. A representative from Evolution stated that the potential merger would not have a significant impact on the employees of either Evolution or NetEnt.
On the morning of June 24, Evolution's stock price fell by 9.64% to $59.38 per share, bringing the company's current market capitalization to $11.89 billion.