Paddy Power and Betfair Announce Possible Merger

British bookmaker Betfair and Irish gaming company Paddy Power announced earlier today that they had reached an agreement over the major terms of their potential merger. If completed, it would result in the creation of Paddy Power Betfair plc, one of the world’s largest online gaming and betting companies in terms of generated revenue.

The two operators pointed out that the possible merger would be equally beneficial for both of them and would give them the opportunity to further bolster their position in both online gaming and betting markets as well as to deliver synergies, more benefits for gambling customers, and shareholder value.

Under the negotiated terms, Paddy Power would hold a 52% stake in the new entity. Betfair shareholder would own 48% respectively. Once the merger is completed, Paddy Power shareholders would be paid an €80 million dividend.

Paddy Power Chairman Gary McGann would be appointed as Chairman of the new entity’s board. Betfair CEO Breon Corcoran will become CEO of the combined group. Andy McCue, CEO of Paddy Power, would become Executive Director and COO of Paddy Power Betfair. Last but not least, Betfair CFO Alex Gersh would be appointed as Executive Director and CFO of the combined group.

The two companies also said that the merger would result in the creation of one of the largest online gaming and betting companies in the world with proceeds of more than £1.1 billion (€1.5 billion). In addition, the new entity would be better positioned to compete in both existing markets and the ones it is to enter in future.

Although no merger may occur, Betfair and Paddy Power are expected to provide more information on the matter in the weeks to come. The companies noted that the terms of the deal are remaining conditional upon completion. The involved parties have reserved the right to waive the terms or to make an offer on other terms.

Discussions over the potential merger are to continue and the structure of the new entity is to be further considered. Paddy Power has up until 5 pm on September 23, 2015 to announce its decision on whether it would make an offer for the possible merger or not. However, this deadline does not apply, if Betfair is considered the offeror.

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