Paddy Power/Betfair & SkyBet Owners Given Greenlight For Mega Merger

stats group flutter mergerThe proposed mega bucks merger of Paddy Power Betfair and Sky Bet owners The Stars Group has been ratified and rubber stamped after the UK’s Competition and Markets Authority (CMA) officially gave the deal the greenlight In February, the CMA originally cleared Flutter’s £10 billion purchase after receiving the deal which was announced in October.

The merger will now see 100% of Stars Group shares coming under the ownership of Flutter Entertainment as well as all of the Stars brands. Whether the new super group will retain the name Flutter or re-emerge under a new title is as yet unknown but business is thought to be worth a combined total annual revenue of £3.8 billion.

Dotting The I’s and Crossing The T’s

business man on a planeAll that is left now is for Flutter shareholders to officially approve of the deal when they meet next on the 21st of April, four days before Stars’ senior figures meet to agree at their own vote on the 24th of April. Save for some last minute ticks required from a small number of alternative regulatory bodies, such as UK Financial Conduct Authority, London Stock Exchange and Euronext Dublin, and bypassing whatever obstacles Covid-19 puts in is way, the transaction should be concluded this spring.

CEO of Flutter Entertainment, Peter Jackson, said;

“This morning’s announcement from the CMA marks a further important milestone in the process towards completion of our proposed combination with The Stars Group.

We continue to work with the remaining international regulatory authorities to obtain the last of the outstanding approvals. Separately, last week we published the necessary documentation ahead of the shareholder votes in April and we continue to make good progress in our post-completion planning.”

Senior Positions Have Already Been Sorted

complex ownership structureLast week, both existing groups went ahead and announced that senior positions had already been divvied up for the soon to be mega-group. Current Stars Group CEO Divyesh Gadhia will now go on to become deputy chair of the new group, which for the time being will remain Flutter Ent.

Another CEO, Rafi Ashkenazi, who has been through three such mergers and as many such group names from Rational Group to Amaya Inc to Stars Group, will take up an operational role, while Richard Flint, Alfred Hurley Jr, David Lazzarato and Mary Turner will all become directors.

Once done, the deal will bring PokerStars, BetStars, PokerStarsCasino, PokerStars Live, Full Tilt Poker, Sky Betting & Gaming as well as BetEasy under the Flutter Entertainment umbrella where they will now become stable mates of Paddy Power, Betfair, Fanduel and Sportsbet Australia.

What Will This Mean For Competition?

Flutter and stars group logosThis is the latest in a long line of big mergers in the last 3-4 years.  We’ve seen Coral merge with Ladbrokes before that group was then bought out by the mega entity that is GVC.  Paddy Power and Betfair merged a few years back and re-branded as Flutter Entertainment and now that group is merging with the stars group, who own SkyBet.

This now means, alongside William Hill, Bet365 and 888 Holdings that the industry is now dominated by five giants.  There are also other massive companies on the fringes of this such as the Kindred Group, that own Unibet and 32Red.

To say this won’t affect competition is naive, given the power these groups now have they can largely dominate the direction of the market.  This combined with heightened pressures for smaller brands in the form of higher tax, more regulation and an already saturated market means a potential monopoly is becoming more liekly.

In ten years we could see and entirely different betting landscape that looks more like a financial or energy market, dominated by just a few companies.

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