Ireland-based bookmaking business Flutter Entertainment plc, which owns the Paddy Power and Betfair brands, announced that it has agreed on an all-share merger with the Canadian online gambling company The Stars Group. The deal will end up creating the biggest online gambling operator by revenue on a global scale.
Today, Flutter Entertainment announced that it would combine its operations with the owner of Poker Stars, Stars Group Inc in a deal which values the two companies at about £10 billion. Once the merger is finalised, the shareholders of the Ireland-based group are set to own approximately 55% in the new entity, while Stars Group’s shareholders will hold the remaining 45% in the company.
.@FlutterPLC is delighted to announce that we’ve reached an agreement on a recommended all-share combination with The Stars Group, creating a global leader in sports-betting and gaming. Find out more here: https://t.co/4oKhgG4zpM
— Flutter plc (@FlutterPLC) October 2, 2019
The agreement has become the latest one in the series of acquisition and merger deals at the time when the global betting industry responds to the increasing number of gamblers who prefer to go online and gamble by using their smartphone, tablet and other mobile devices.
The combination between @FlutterPLC and The Stars Group will create a global leader in sports-betting and gaming. Here are some of the highlights of the combined group. pic.twitter.com/N6w6jMFVzx
— Flutter plc (@FlutterPLC) October 2, 2019
In addition, the UK gambling market, where many of the largest gambling businesses are based, has become more demanding to gambling companies, with the Government imposing a stricter regulatory regime on the businesses as part of its efforts to tackle the possible negative consequences of gambling. This has pushed British gambling companies to seek expansion elsewhere, with the US being a preferred destination for British gambling firms looking for further growth.
The Merged Group Will Partner with FOX Sports in the US
The current Chief Executive Officer of Flutter Entertainment, Peter Jackson is to remain at his position in the combined group after the merger is finalised. Still, it was announced that the deal would see some major changes in the existing strategy of Flutter. The company plans to offer a great variety of capabilities across gaming, poker, sports betting, daily fantasy sports, etc.
After the deal is finalised, the merged group will retain the Dublin-based headquarters and its main listing on the London Stock Exchange.
.@FlutterPLC CEO Peter Jackson on the transformational combination with The Stars Group pic.twitter.com/zd1iQe884b
— Flutter plc (@FlutterPLC) October 2, 2019
As mentioned above, the merged gambling group will become the largest gambling operator on a global scale. In addition, its influence will be boosted by a partnership with FOX Sports in the US, which will be given the opportunity to purchase an 18.5% stake in FanDuel US business from 2021. Back in 2018, Flutter joined forces with the US daily fantasy sports company FanDuel in a deal which was set to create the biggest online entity in the US.
The last few years have seen Flutter Entertainment become more focused on expanding into North America to take advantage of the potentially large US market. At the same time, the company has been facing difficulties due to the higher taxes and stricter regulations in its major British, Irish and Australian markets. Now, the newly-announced deal has come as the latest step towards consolidation in the gambling industry.
- Author
Olivia Cole
