Flutter Entertainment and The Stars Group are to merge in an all-share deal that creates one of the world’s largest online gambling companies.
The merger will see Flutter – formerly known as Paddy Power Betfair – own 54.64 per cent of the new company, with TSG shareholders owning the other 45.36 per cent of the share capital.
The combined group is anticipated to achieve pre-tax cost synergies of £140m per year, in addition to potential cross-sell in international markets and lower finance costs.
Upon completion, it is anticipated that the combined group’s board will comprise of 14 people, with current Flutter chair Gary McGann assuming the role of chair.
Divyesh Gadhia, currently executive chairman of TSG, will be deputy chair; Peter Jackson, currently CEO of Flutter, becomes CEO; Jonathan Hill is to be CFO and current TSG CEO Rafi Ashkenazi becomes COO.
Additionally, nine non-executive directors will comprise of five nominated by Flutter, three nominated by TSG and the appointment of Richard Flint, former CEO of Sky Betting and Gaming.
Andrew Higginson has joined the board of Flutter as a non-executive director with immediate effect.
The approval of Flutter and TSG shareholders is expected to be sought in the second quarter of 2020, with completion expected during the second or third quarter of 2020.
McGann, chair of Flutter, said: "This is an exciting and transformational combination that will bring together two strong, complementary businesses to create a global leader in the fast-growing online sports betting and gaming industry.
“Under Peter Jackson's leadership we will bring together a management team with the experience required to ensure a successful integration of the businesses, with minimal disruption, during a time of unprecedented change in the sector.
“The combined group will be a strong voice in the promotion of responsible gaming worldwide and will lead industry standards on the protection of customers, whilst building sustainable relationships with them."
Divyesh Gadhia, executive chairman of TSG, said: "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.
“Over the past four years our team, led by Rafi, has been working relentlessly and passionately to stabilise, grow and establish TSG as one of the clear leaders in our industry. We seized new opportunities in poker, significantly grew our casino business, acquired one of the UK's most notable sportsbook brands in Sky Bet, built a significant presence in Australia through BetEasy, and teamed up with FOX Sports to launch FOX Bet to position ourselves to become a leader in the US.
“We have long had respect for Flutter, and believe the combination is a natural next step in the evolution of the business, creating a leader in online betting and gaming with trusted brands, diversified revenues, stand-out technology and the best operational and managerial talent in the industry.
“With TSG appointing a significant portion of the new board, we look forward to working together with Gary, Peter and the Flutter team to continue and contribute to the success of our combined business."
