The Stars Group, Flutter Entertainment announce merger
One of the largest gaming firms in the world was recently acquired by an Ireland-based entertainment company. The Stars Group, based in Canada, will be acquired by Flutter Entertainment, which will create one of the largest online gambling and betting companies in the whole world. The deal will be an all-stock deal, with Flutter shareholders owning roughly 54.64% of the new company and The Stars Group shareholders owning roughly 45.36%. The Stars Group was valued at approximately $9 billion in the deal, based on how the Flutter Entertainment share price was valued in London following the announcement of the deal. The deal is expected to close sometime in the second half of next year.
The Stars Group initially made a name for themselves through their Poker Stars brand of online poker. They have also recently dabbled in the online sportsbook market, especially once the ban on sports betting was overturned in the United States.
The Stars Group recently created a partnership with Fox Sports for a betting platform in the United States, and that partnership is expected to continue should everything go well in the proposed merger. In fact, Fox Sports would have the right to acquire 18.5% equity in the FanDuel Group, which is owned by Flutter Entertainment.
Flutter’s CEO, Peter Jackson, will take up the same position of the new merged company. He said they’d continue to work with Fox Sports as well as expand FanDuel in the U.S. market.
The Stars Group’s CEO, Rafi Ashkenazi, will become the new company’s COO.
Not surprisingly, the executives of the two companies involved in the merger are saying great things about the prospects ahead for the new company.
“The board of TSG and I are delighted to recommend this exciting combination of TSG and Flutter, which we believe will create significant value for TSG’s shareholders, said Divyesh Gadhia, TSG executive chairman.
As for Flutter, their CEO had nice words to say as well.
“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,” Jackson said.
What’s ahead for the proposed merger?
While the terms of the merger of The Stars Group and Flutter Entertainment have been announced — and trading numbers have already fluctuated on the London Stock Exchange as a result — there are still some potential hurdles to overcome before it can officially become a deal.
Because the two companies operate in multiple countries, they need to receive regulatory approvals from various governments before the deal can go through. This includes approvals in the United States, Canada, Australia and the United Kingdom Ireland.
In addition to the governmental approvals, the shareholders of both The Stars Group and Flutter Entertainment must approve the deal as well, since they are public companies. These votes are expected to take place in the second quarter of next year. If everything goes as the two companies are hoping it does, then the agreement has the possibility of closing either the second or third quarter of 2020.
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