The Stars Group (TSG) which is best known for its PokerStars brand, and Flutter Entertainment (formerly Paddy Power Betfair) have recently announced that they have agreed to a merger that will create one of the biggest gambling operations on the planet. The all-share deal between the two companies is reportedly worth more than $10 billion and it is a non-cash transaction that will see Flutter shareholders hold a 54.64 percent stake in the new company. The remaining 45.36 percent stake will be owned by The Stars Group.
Management Plans
Once the merger is complete, Peter Jackson, the current Flutter Chief Executive, will be at the helm of the operation while Rafi Ashkenazi, The Stars Group’s current chief executive, will assume the role of Chief Operating Officer (COO). Flutter’s Gary McGann and The Stars Group’s Duvyesh Gadhia will become the new Chairman and Deputy Chairman respectively while Jonathan Hill who is the current Chief Financial Officer of Flutter will retain the same position.
The new company’s name is yet to be announced but it has been confirmed that it will be headquartered in Dublin, Ireland – the current home of Flutter. All these changes will come into effect when the merger is complete either in the second or third quarter of 2020 – it will be subject to a shareholder vote during the second quarter after which it will be approved in the third quarter. This is, of course, on condition that the regulatory approvals in the five different jurisdictions are forthcoming.
As mentioned earlier, the new company which is likely to continue trading under the Flutter name will be massive, and arguably the largest online sports betting and gambling company in the world. Combined, the customer bases of both companies will add up to a whopping 13 million and this will result in annual revenues of £3.777 billion.
Flutter’s Global Expansion Plans
In its bid to extend its footprint across the globe, Flutter has come up with a “four-pillar growth strategy”. These apply to its move to merge with The Stars Group and they include:
- Ideally position the Combined Group to pursue the US opportunity through a leading combination of brands, media reach, and product offering.
- Helping the Combined Group to maximize profitable growth in its core markets of the UK, Ireland, and Australia,
- Providing the platform and capabilities to accelerate growth across international markets, and
- Attaining new podium positions in Spain, Italy, and Germany and provide a highly regarded customer proposition to approximately 4 million Active Customers in more than 100 international markets,
The pursuit of the United States’ gambling market is perhaps the most significant one especially considering the fact that the sports betting market is growing at a very fast rate. As such, positioning themselves as a viable option for bettor will be very important.
