Paddy Power and Betfair Agree on £5 Billion Merger Deal
Two gambling giants, Paddy Power and Betfair, have reportedly agreed to a possible merger worth £5 billion.
It is thought that the resulting online gaming and betting chain would have revenues of £1.1 billion and would be one of the most valuable bookmaking brands on the stock markets. However, both companies have cautioned that there is no guarantee that the deal will take place and they expect to make a further announcement in the coming weeks.
The companies’ boards have agreed to rebrand the business as Paddy Power Betfair and Paddy Power shareholders would own 52% while Betfair would own 48%. In a statement issued they explained that the merger has “compelling strategic logic and represents an attractive opportunity for both companies”.
Should the merger take place then Paddy Power shareholders will receive a special dividend of £58 million. At the same time Breon Corcoran, the Chief Executive at Betfair, would become the new company head.
The new company would overtake William Hill as the UK’s largest bookmaker and rival the proposed merger between Ladbrokes and Gala Coral. Over the last few years Paddy Power has enjoyed rapid growth with more than 350 betting shops opening in Ireland and the UK and it is currently the third largest online bookmaker and sixth largest online gaming business in Britain and Ireland.
Betfair emerged from The Sporting Betting Exchange which was created by Andrew Black and Edward Wray in 1999. It was the first online betting exchange and quickly become extremely popular with punters before being floated on the London stock exchange in 2010.