Flutter to acquire The Stars Group to create new online gambling giant
Merger will see Flutter shareholders own 55% of the new company which would have recorded combined revenues of £3.8bn in 2018
Flutter Entertainment has agreed an all-share deal to buy PokerStars owner The Stars Group (TSG) to create what the two companies claim will be the world’s largest online betting and gaming operator.
The merger will see Flutter shareholders own 54.6% of the new company and TSG shareholders own 45.4%, with the combination expected to deliver pre-tax cost synergies of £140m per annum.
According to a joint statement this morning, the combined group would have recorded full-year revenue of £3.8bn in 2018, with brands in the group including PokerStars, Sky Bet, FanDuel, Paddy Power and Betfair.
Upon completion of the deal the new senior management team of the combined group will include Flutter CEO Peter Jackson as group CEO, TSG CEO Rafi Ashkenazi as COO and Flutter chair Gary McGann as group chair.
£3.8bn
Combined group’s annual revenue in 2018 on a proforma basis
13 million
Number of active customers (may include active customers who are active with both companies)
£1.1bn
Combined group’s annual EBITDA in 2018 on a proforma basis
14
Number of people on the new board, including former SBG CEO Richard Flint as a non-exec director
£140m
Pre-tax cost synergies by end of the third full year post-completion
A new 14-person board will also be created, consisting of Jackson, Ashkenazi, McGann, TSG executive chairman Divyesh Gadhia, Flutter CFO Jonathan Hill and former Sky Betting & Gaming CEO Richard Flint as a non-executive director.
“The combination represents a great opportunity to deliver a step change in our presence in international markets and ensure we are ideally positioned to take advantage of the exciting opportunity in the US through a media relationship with FOX Sports as well as our development of US sports betting through Flutter’s FanDuel and TSG’s FOX Bet brands,” Jackson said.
He added: “The combination will turbocharge our existing four-pillar strategy and provide world-class capabilities across sports betting, gaming, daily fantasy sports and poker, as well as greater geographical and product diversification.
“We believe the combination of Flutter and TSG will deliver substantial value for shareholders. We will have an exceptional portfolio of leading recreational brands and best-in-class products on industry-leading technology platforms.”
Flutter Entertainment’s share price was up 15.22% at the time of writing.