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Stars Group and Flutter Entertainment ready for mega-merge

Flutter Entertainment (formerly known as Paddy Power Betfair) is merging with Nasdaq listed Stars Group (TSG) in an all-share deal that will create one of the world’s biggest online betting group.

Following the merger, shareholders of Flutter, would own approximately 55 per cent of the new company, with TSG Shareholders owning approximately 45 per cent of the share capital.

Flutter chief executive Peter Jackson emphasised that he believed there should be no concerns regarding whether the merger would pass competition checks in the UK.

“We’re very respectful of the competition authorities such as the CMA in the UK. We look forward to working with them in due course and we are confident that we will receive the relevant approvals in due course,” said Jackson, who is expected to remain at his position in the combined group after the merger is finalised.

Flutter and TSG said that the merger would deliver substantial value creation for shareholders from pre-tax cost synergies of £140m per year, as well as potential revenue cross-sell in international markets and lower finance costs.

However, Rafi Ashkenazi, chief executive of the Stars Group, said that despite the synergies, the deal was primarily about growth.

“This is about driving growth into the business. Cost synergies are important but they’re not why we’re doing this deal,” he explained.

Should the deal gain all of the necessary approvals, Flutter and TSG said they hope to complete the deal during the second or third quarter of next year.

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