This week we saw another great moment in the history of global gambling and sports betting when Flutter offered the Canadian-owned Stars Group a deal, owners of brand names like Paddy Power and PokerStars to take over the company in a cross-border transaction. This will create the most significant betting company globally, with the UK based company then being worth 10 billion pounds with an estimated annual turnover of £3.8 billion.
It has been a long time since Flutter group started pursuing the deal to acquire their Canadian company according to Peter Jackson, chief executive of Flutter. He will also be the one at the helm of steering this very complicated deal to completion. According to Jackson, the two companies showed interest in each other a while ago, but during this summer, they started a more serious conversation with the Canadian group.
The Third Largest Acquisition
When this deal is completed, it will be the third-largest deal of its kind in the gambling industry. Valued at $6 billion it comes in second after another deal of Flutter when Betfair was bought for $10 billion.
Since the legislation in the United States changed during May last year and the PASPA legislation of 1992 was no longer applicable, the Canadian and US markets opened up to online gambling and sports betting one state after the other. This created a gold rush to the US shores, and companies from all over the globe tried to get a piece of this lucrative market. Many of these companies are based in the UK and Ireland since they do come with a great deal of expertise since gambling has been legal for decades in these countries. Now the Irish based company is also trying to expand its interest in the US market through buying the Canadian group.
The Stars Group
The Stars Group is exceeding Flutter by six times when the markets outside of Europe, the United States and Australia are considered. Thus with this acquisition, the combined companies will serve more than 13 million users globally, situated in more than 100 countries. They are also estimated to generate £140 million annually before tax deductions. This is a lucrative move for the shareholders of The Stars Group. For every share they own in The Stars Group, they will receive 0.23 shares from Flutter. Also, Flutter is reaping benefits with an increase in share prices of 17% and The Stars Group shares increased with 30% when the markets in Toronto opened.
During May, The Stars Group who already owns PokerStars and Sky Betting and Gaming signed a partnership deal with Fox Sports which will be delivering sports betting to the United States while Flutter owns FanDuel, the New York-based sports fantasy betting site. Combined, these two companies will be the largest online gambling and sports betting provider in the world.