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Paddy Power owner agrees tie-up with PokerStars rival
2nd October, 18:34Paddy Power and Betfair owner Flutter Entertainment has agreed a merger deal with Canadian rival The Stars Group to create the world's largest online betting firm with combined annual revenues of £3.8 billion.
Flutter - previously called Paddy Power Betfair - will own 54.6% of the merged firm, which will have its headquarters in Dublin and be listed on the London Stock Exchange as well as on Euronext Dublin.
The tie-up - completed through a takeover of The Stars Group (TSG) by Flutter - will allow the two firms to make savings of £140 million a year, while there will also be potential revenue cross-sell in international markets and lower finance costs.
Flutter chairman Gary McGann will become chairman of the combined group, while Flutter chief executive Peter Jackson will head up the firm in the same role.
Rafi Ashkenazi, chief executive of TSG, will become chief operating officer of the combined group.
If the deal is approved by shareholders of the two firms, it is expected to complete in the second or third quarter of next year.
Following the transaction, Flutter said it will have customers in more than 100 international markets and will gain TSG's well-known brands PokerStars and Sky Betting & Gaming.
Shares in Flutter were 7% higher after the merger was revealed.
Mr Jackson said the deal will "turbocharge" Flutter's growth strategy.
Mr McGann added: "This is an exciting and transformational combination that will bring together two strong, complementary businesses to create a global leader in the fast-growing online sports betting and gaming industry."
Mr Ashkenazi said the deal will "position us strongly for the future in this rapidly evolving industry".
It comes amid a period of unprecedented change in the global betting industry, which has seen a raft of deals in recent years amid the rise in online gaming and regulation crackdowns.
James Wheatcroft, an analyst at Jefferies, said it was a "compelling" deal.
The deal follows a partnership announced in May between TSG and Fox Sports to provide sports betting to the US, while Flutter is already targeting America after buying US fantasy sports betting site FanDuel last year.