Betfair announced on Wednesday that they laid the stepping stone for a merger with Irish rival Paddy Power. The merger is estimated at approximately 5 billion pounds and it is expected that the two companies would form the biggest online betting and gaming groups on the UK market. The new dual-brand combined entity is said to be the operators’ response to the high taxes and tight regulation that they have to comply with and that their combined forces would lower expenses and improve returns.
“We think this is a very attractive opportunity, the scale and capability is unsurpassed and would leave us in a much better place to compete in our current markets where competition is intense,” Cormac McCarthy, chief financial officer of Paddy Power told Reuters during a phone interview.
“We are enthused by this, we think it’s very attractive but at the moment it’s just a possibility and there’s a lot to be done in the coming weeks and months.”, he added.
Although further official announcements are expected in the following weeks, Peel Hunt analyst, Nick Bertram said: “This merger is about two of the gaming industry’s strongest players, with a familiar philosophy, getting together to create something of even greater scale and depth,” according to The Telegraph. “In terms of execution risk, this looks pretty small given Breon’s long and successful tenure at Paddy Power”, he continued.
“Hot on the heels of the Ladbrokes/Coral merger, we can exclusively reveal that we have merged with Betfair. Our new name is Betty Power” said a tweet on Paddy Power’s official Twitter page. Under the current agreed upon terms, Irish bookmaker Paddy Power’s shareholders would hold 52% of the group, with the rest going to Betfair Shareholders. The chairman of Paddy Power, Gary McGann will become chairman of the new founded company.