SBC News Voice of the Sports Betting Industry
Paddy Power and Betfair have announced plans for a sensational merger. The betting exchange and the bookmakers have reached an agreement in principle on the key terms of a possible merger of Paddy Power and Betfair to create Paddy Power Betfair plc.
The firms said that 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. They argue that 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.
As part of the deal, Paddy Power shareholders would own 52% and Betfair shareholders would own the rest of the issued and to be issued share capital of the Combined Group. Immediately prior to completion, Paddy Power shareholders would receive a special dividend of €80 million.
Breon Corcoran, CEO of Betfair, would become CEO of the merged entity with Paddy Power CEO Andy McCue becoming COO and an Executive Director. Alex Gersh, CFO of Betfair, would become CFO and an Executive Director of the combined group; while the new Chairman would be Gary McGann, Chairman of Paddy Power.
The structure of the Possible Merger is being finalised with a view to maximising benefits to shareholders and other stakeholders, and it is expected that the Combined Group will maintain a significant presence in Ireland and in the UK.
The ‘compelling rationale’ appears to just be scale. The deal will create of one of the world’s largest public online betting and gaming companies with revenues of over £1.1 billion, which would leave it better placed to compete in existing and new markets.
A dual brand approach will remain, at least in Europe, and the new diversified group would have strong platforms across online and retail in the UK and Ireland, and attractive international growth opportunities in Continental Europe, the US and Australia.
The firms added: “Cost and revenue synergies from efficiencies which reflect the complementary nature of the businesses and through leveraging of the Combined Group’s enlarged scale.”
The Paddy Power Twitter account has taken it in good stead.
.@Betfair Morning brother! ?
— Paddy Power (@paddypower) August 26, 2015
.@Betfair bagsy top bunk!
— Paddy Power (@paddypower) August 26, 2015
