Flutter and Stars Group announce merger

The merger between Flutter Entertainment and The Stars Group is set to create the world’s largest online gambling operator.

US.- The online gambling world is set to be revolutionised, as Flutter Entertainment and The Stars Group have announced their intention to merge. The combination of these companies will end up creating the largest online gambling operator in the world.

The companies released a statement on Wednesday saying that their boards reached an agreement on the terms of a recommended all-share combination, implemented through acquisition of The Stars Group by Flutter. This is pursuant to a plan of arrangement under the Business Corporations Act.

The combination of the companies will create a global leader in sports betting and gaming. The Combined Group will feature a diverse portfolio of leading brands, including FanDuel and FOX Bet. They estimate that the merge will allow them to benefit from an enhanced global platform and improved local market reach. On a proforma basis, the Combined Group’s annual revenue would have been £3.8 billion in 2018, making it the largest online betting and gaming operator globally.

Moreover, they said that the Combined Group will have its headquarters in Dublin, Ireland, with a premium listing on the London Stock Exchange and a secondary listing on Euronext Dublin.

Following completion, Flutter shareholders would have in their possession approximately 54.6%, while TSG shareholders would own 45.3% of the Combined Group. This approval is likely to happen in the second quarter of 2020, while completion will happen on the second or third quarter of next year.

FOX Sports backed the merger

The group received the backing of Fox Sports in the US, as the media company will boost the merger. It will have the right to acquire an 18.5% stake in FanDuel US from 2021. “We’re excited to be able to expand our partnership into FanDuel. Which together with FOX Bet, will be a leader in sports wagering in the U.S.,” said Fox Corp CEO Lachlan Murdoch.

Flutter’s word

Gary McGann, Chair of Flutter, said: “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.

“Under Peter Jackson’s leadership we will bring together a management team with the experience required to ensure a successful integration of the businesses, with minimal disruption, during a time of unprecedented change in the sector.

“The combined group will be a strong voice in the promotion of responsible gaming worldwide and will lead industry standards on the protection of customers, whilst building sustainable relationships with them.”

The Stars Group’s statement

Dave Gadhia, Executive Chairman of TSG, commented: “The Board of TSG and I recommend this exciting combination of TSG and Flutter, which we believe will create significant value for TSG’s shareholders. Over the past four years our team, led by Rafi, has been working relentlessly and passionately to stabilise, grow and establish TSG as one of the clear leaders in our industry. 

“We seized new opportunities in poker, significantly grew our casino business, acquired one of the UK’s most notable sportsbook brands in Sky Bet, built a significant presence in Australia through BetEasy, and teamed up with Fox Sports to launch Fox Bet to position ourselves to become a leader in the US.

“We have long had respect for Flutter, and believe the combination is a natural next step in the evolution of the business, creating a leader in online betting and gaming with trusted brands, diversified revenues, stand-out technology and the best operational and managerial talent in the industry. 

“With TSG appointing a significant portion of the new Board, we look forward to working together with Gary, Peter and the Flutter team to continue and contribute to the success of our combined business.”

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