Flutter Entertainment, the owner of Paddy Power, has agreed to buy the parent company of PokerStars in an all-stock transaction to create the world’s largest online business.
Under the terms of the transaction, investors in Toronto-listed The Stars Group will receive 0.2253 shares in London-listed Flutter for each share held, in a deal worth about $6 billion. Following the merger, Flutter investors will own 54.4 percent of the group.
The pro-forma revenue of the combined group would have been GBP3.8 billion in 2018.
The combination will bring together two complementary businesses to create a global leader in sports betting and gaming, Flutter said in a statement. The group will have a diverse portfolio of leading brands and complementary best-in-class products with a broad geographic reach.
The deal is expected to create pre-tax cost synergies of GBP140 million per annum, along with potential revenue cross-sell in international markets and lower finance costs.
“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,” Flutter CEO Peter Jackson said. “We are committed to these two high quality brands to drive the growth of the Combined Group in the US.”