New multi-billion dollar merger on international gambling market
31 August 2015
A new, multi-billion dollar merger is happening on international gambling market. Two suppliers, Betfair and Paddy Power lead a £ 5 billion merger talk. Recently, the company Betfair and its Irish rival Paddy Power announced that they have reached an agreement in principle on a £ 5000000000 merger. This is the latest deal in a number of mergers in the online gambling sector. The two companies were already talking longer about a merger; one of the world’s largest online gambling groups would create a turnover in excess of £ 1.1 billion.
The Paddy Power shareholders will in future own 52 percent of the Befair shares. Prior to the completion Paddy Power would immediately pay a special dividend of € 80 million to its shareholders. Paddy Power is the larger of the two companies with a market capitalization of 3.46 billion euros compared to £ 2.43 from Betfair. However the shares of Betfair increased by 140 percent in one year in response to the strong sales growth.
Betfair chief executive Breon Corcoran, a former chief operating officer at Paddy Power, is seen as the leader of the new group, who will share his expertise with Paddy Power Chairman Gary McGann. This cooperation is the latest in a flurry of transactions within the sector. It is the reaction of the companies to higher tax bills in the UK and stricter regulations. This way the competitiveness in the fast-growing online market is supposed to be improved. Last month, Ladbrokes and Gala Coral announced an all-share merger that has a £ 2.3 billion heavy bookmaker to its sequence and also 888 and GVC Holdings are in a bidding war for the online gambling company Bwin.party Digital Entertainment.