$12.2 Billion Flutter-Stars Group Mega-Merger to Complete May 5, Creating World’s Biggest Online Gaming Group

Posted on: May 1, 2020, 01:15h. 

Last updated on: July 19, 2021, 02:20h.

Flutter Entertainment’s shares spiked Thursday as the company announced its $12.2 billion merger with The Stars Group (TSG) would complete May 5, creating the biggest online gaming company in the world.

Flutter Entertainment
The Flutter Entertainment and Stars Group deal has cleared all remaining hurdles and heads into the final straight. (Image: The Times)

The enlarged group would have generated combined revenues of around $4 billion in 2019, with 13 million active customers in more than 100 international markets.

It will begin trading in London and Dublin on May 5.

Flutter said the deal received final backing from antitrust authorities in numerous jurisdictions around the world. Last week, shareholders of both parties voted by over 99 percent – TSG’s by 99.9 percent — to approve the tie-up, which will see Paddy Power parent Flutter acquire all issued and outstanding common shares of TSG.

Flutter shareholders will own around 54.64 percent of the new business and TSG investors the remaining 45.36 percent.

Flutter is the parent company of leading online gaming brands in Europe, Australia and the US, including PaddyPower, Betfair, Adjarbet, FanDuel, TGV, and Sportsbet.

TSG owns the world’s biggest online poker site, PokerStars, as well as major UK-facing online sports betting operation Sky Betting and Gaming (SBG), and the fledgling, Fox Sports-backed US betting platform FoxBet, among others.

‘Federal Operation’

“The enlarged group brings together exceptional brands, products and businesses, a hugely talented and experienced team, and a diverse global presence,” said Flutter CEO Peter Jackson, who will also become CEO of the combined company.

“The strength of our combined portfolio of assets means that we approach the future with confidence in these uncertain times,” he added.

Jackson said the enlarged group would continue to function under its “federal operating model,” which offers a degree of regional independence to its business segments.

All US operations, which include FanDuel and TSG, will be merged into one reporting unit, while TSG’s international business will form another separate unit.

Three more, Paddy Power Betfair, SBG, and Sportsbet, will continue as distinct reporting entities in the short term.

In the longer term, Flutter will merge TSG’s international operations with Paddy Power Betfair and SBG to form a new UK and Ireland division, the company said.

Fair Competition

This deal was not always a sure bet. There were concerns that the proposed merger would fall foul of antitrust authorities, particularly in the UK where the combined group will hold a 40 percent share of the sports betting market.

But the deal vaulted that particular hurdle late last month when the UK’s Competitions and Markets Authority decided there was enough choice for the consumer and the tie-up would not “worsen the offering to people who choose to bet online.”

This week, Moody’s analysts predicted further consolidation within the gambling industry as companies seek greater scale to help absorb the financial shock of the coronavirus crisis.