Betfair and Paddy Power take a ₤ 5bn merger punt

26 August 2015

Betfair and Paddy Power are set to merge in a ₤ 5bn bet9ja's welcome offer that would create one of the world's biggest online wagering and video gaming companies.

Final details are still being exercised, however the companies said the deal had "compelling tactical reasoning" and increased their market position.

Paddy Power shareholders would own 52% of the combined company, with Betfair financiers owning the staying 48%.

the yohaig code combined service would have annual profits of some ₤ 1.1 bn.

"Discussions stay ongoing relating to the other regards to the yohaig code possible merger," a statement stated on Wednesday, external.

The brand-new group would be the UK online market leader with a 16% share, according to market data, passing a merged Ladbrokes/Coral on 14%, along with William Hill and the privately owned Bet365.

Shares in Betfair soared 17% to ₤ 30.60 on Wednesday, while Paddy Power jumped more than 18% in Dublin.

If the bet9ja's welcome offer proceeds, Breon Corcoran, manager of Betfair, would become primary executive of the combined group, while his counterpart at Paddy Power, Andy McCue, would become chief operating officer.

'Everything about scale'

The combined business prepares to keep the "distinctive and complementary" Betfair and Paddy Power brand names in Europe.

Mr Corcoran stated: "We essentially believe this industry is everything about scale. By creating 2 distinct however phenomenally strong brands, we'll have a market leading position in the UK, Ireland, Australia and in the United States."

Cormac McCarthy, Paddy Power's primary monetary officer, said the combination was an "attractive chance".

"The scale and ability is unparalleled and would leave us in a far better place to compete in our current markets, where competitors is extreme," he stated.

Given the complementary nature of the two companies, he was positive that any competition issues might be gotten rid of.

Paddy Power was founded in 1988, when three Irish bookmakers combined. It has 350 betting shops and is the third-largest online bookmaker.

Betfair, in contrast, is offering a market - or wagering exchange - that lets consumers bypass the need for a conventional bookie.

Based on their closing rates on Tuesday, Betfair was worth ₤ 2.4 bn and Dublin-listed Paddy Power deserved EUR3.4 bn (₤ 2.5 bn).

Industry mergers

Shareholders in Paddy Power would receive a special code yohaig dividend of EUR80m.

There has been a flurry of merger activity in the gambling sector in recent months.

In July, online betting company 888 Holdings won a takeover battle for rival Bwin.party in a cash-and-stock deal valued at about ₤ 898m.

The two business had remained in conversations considering that the middle of May.

Ladbrokes and Gala Coral also recently sealed a ₤ 2.3 bn merger.

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17 July 2015

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