The Flutter Entertainment and The Stars Group mega-merger is finally happening

Flutter Entertainment and The Stars Group mega-merger finally happening

The Stars Group to merge with Flutter Entertainment in the iGaming deal of the century.

After a long moment of pure anguish, the British authorities have finally given their agreement for what some are calling the deal of the century. Two of the iGaming industry giants (Casinos and Sports betting), Flutter Entertainment and The Stars Group will unite under the same banner to constitute the largest company in the gaming industry.

The new group called “The Combined Group”, if the project comes to fruition, of course, will be the biggest listed gambling company in the world, with an annual turnover of 4.3 billion euros, more than 13 million active users in over 100 different countries worldwide.

Now that the procedure has begun, the question remains to know when the involved parties, shareholders and regulatory authorities will give their approval to see the birth of the new supergroup. The new group will be led by the current CEO of Flutter Peter Jackson, who will be assisted by a board of directors made of 14 members.

The new elephant in the room. What’s left for the competition?

The online gaming industry is one of the most competitive and dynamic sectors in the world. Industry actors are always looking for new technologies such as those used in Pay N Play Casinos, but also new opportunities and partnership deals to grow the business.

Despite this dynamism, the association of Stars Group and Flutter Entertainment is something the industry has never seen before. Not only because of the financial weight that “The Combined Group” will have, but also on the part of the market which will be flooded with brands controlled by the new group. That said, 3 of the biggest British sports betting and online casino brands will end up under the same umbrella.

The new elephant in the room. What’s left for the competition?

Flutter owns Paddy Power, Sports Bet, Betfair, and FanDuel, while TSG brings BetStars, SkyBet, PokerStars, Oddscheckers, and Full Tilt Poker to the table, to form a gambling super company. Due to the magnitude of the involved parties, local market surveillance authorities had to intervene, to make sure no fair competition rules were violated or broken.

But, according to the inquiry conducted by the AMC, which goes hand in hand with the opinion of several experts in the online gaming industry, there is still a large number of available options for players to choose from. Therefore, there won't be a monopoly case with “The Combined Group”.

The outcome depends on authorities' decisions and the will of the shareholders

After several weeks of consultations and inquiries, the British authorities represented by the CMA (Competition and Markets Authority) finally gave the green light for the merger of the 2 companies. At the same time, Austrian, German and American authorities also expressed no opposition to the successful conclusion of the €11,2 Billion deal after being contacted by the AMC.

It is essential to emphasize that this small victory is the first but important step in a long procedure that may take months. With this authorization from qualified bodies, the Flutter company will, therefore, be able to take over all of TSG’s stock market shares. The later redistribution will grant Flutter 54.64%, while TSG will control 45.36% of the combined shares in the new Group. This symbolic action will constitute a new departure to a brighter future for the implicated companies.

The next step is to obtain the necessary authorization and certificate from the FCA (Financial Conduct Authority) which represents the British state, and from the London and Dublin stock exchanges. In a comment, Flutter CEO Peter Jackson confirmed that things were going as quickly as possible and that they were not expecting any major delays, despite the current situation.

According to our sources, an extraordinary board meeting including Flutter's main shareholders will take place on April 21, 2020. While TSG shareholders will have to decide on the fate of their company a few days later, on April 24, 2020.

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