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 betting and gaming business.

Final details are still being worked out, but the companies said the deal had "engaging tactical reasoning" and improved their market position.

Paddy Power investors would own 52% of the combined service, with Betfair investors owning the remaining 48%.

The combined organization would have annual revenues of some ₤ 1.1 bn.

"Discussions stay ongoing regarding the other regards to the possible merger," a declaration stated on Wednesday, external.

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

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

If the bet9ja's welcome offer proceeds, Breon Corcoran, employer of Betfair, would end up being primary executive of the combined group, while his equivalent at Paddy Power, Andy McCue, would end up being primary operating officer.

'All about scale'

The combined company plans to maintain the "unique and complementary" Betfair and Paddy Power brands in Europe.

Mr Corcoran stated: "We basically think this promotion code industry is all about scale. By putting together 2 unique however extremely strong brand names, 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 mix was an "appealing chance".

"The scale and capability is unsurpassed and would leave us in a much better location to complete in our existing markets, where competition is extreme," he stated.

Given the complementary nature of the two companies, he was positive that any competitors issues might be overcome.

Paddy Power was established in 1988, when three Irish bookies merged. It has 350 wagering stores and is the third-largest online bookie.

Betfair, on the other hand, is using a market - or betting exchange - that lets consumers bypass the need for a traditional bookmaker.

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

Industry mergers

Shareholders in Paddy Power would get an unique dividend of EUR80m.

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

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

The 2 companies had actually been in discussions given that the middle of May.

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

Online gambling firm 888 purchases Bwin

17 July 2015

CVC shelves Betfair takeover bid

14 May 2013