Paddy Power And Betfair Announce Merger
Betfair and Paddy Power have reached an agreement to combine in an all-stock merger to create one of the world’s largest online gambling companies under the name of Paddy Power Betfair Plc.
The union will result in a combined group worth in excess of £6.5 billion where Paddy Power shareholders control 52% of the new business, with the remainder held by Betfair investors. The new group would keep both brands in Europe, have headquarters in both Dublin and London and a dual listing.
The two companies issued a joint statement, which read: “The possible merger would create one of the world’s largest public online betting and gaming companies by revenue with enlarged scale, capability and distinctive and complementary brands.
“The combination has compelling strategic logic and represents an attractive opportunity for both companies to enhance their position in online betting and gaming and to deliver synergies, customer benefits and shareholder value.”
Breon Corcoran, who left Paddy Power in 2012 to become chief executive of Betfair, said: “These are two businesses that are performing at a very high calibre and we will have a market leading position in the UK, Europe, Ireland and Australia.”
“We are paying a slight premium but I regard this as a merger of equals. We have known each other a long time. I used to wear a green jacket. We have been speaking intensely over the summer and warmly for a time before that.”
Mr Corcoran will now become the head of the combined group, which is subject to receiving approval from the competition authorities and the two companies hope the deal would be complete next January.
The merger is the latest round of consolidation in a sector where companies are searching for scale to compete in the face of greater tax and regulation. Earlier this summer, Ladbrokes and Coral announced a merger, and Bwin.party, another online gaming company, is being courted by both 888 and GVC.
Less than a month ago, Paddy Power’s Twitter account joked that after the Ladbrokes and Coral merger, it had joined forces with Betfair. “Our new name is Betty Power,” it said.
The stock exchange reacted positively to the merger plan announcement with Betfair’s shares up 17.5% and Paddy Power’s rising 16.5% in early trading.
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