Paddy Power bets on £11bn merger with Canada rival

THE Paddy Power and Betfair owner has agreed a megamerger with a Canadian rival to create the world’s largest online betting firm.

Flutter Entertainment said its deal with The Stars group (TSG) will create an £11bn giant with annual revenues of £3.8bn.

Flutter also owns online gambling brand Sportsbet, horseracing broadcaster TVG and georgian betting firm Adjarabet.

TSG owns Sky Bet, which it bought last year for £3.8bn, as well as PokerStars, BetStars, Full Tilt, and oddschecker.

The combined firm will be on the London Stock Exchange, with a secondary listing in Dublin, and current Flutter shareholders will control 54.6pc.

Flutter said the move would ‘turbocharge’ expansion, with the firm pushing into the US market where sports betting laws have been relaxed.

The companies are set to wring out savings of £140m. if the move is approved by shareholders and regulators, it is expected complete next year. Flutter chairman gary Mcgann will be group chairman and Flutter chief executive Peter Jackson, 42, will keep his role in the bigger firm.

TSG boss Rafi Ashkenazi will become chief operating officer.

The deal sent Flutter shares soaring 17.7pc, or 1354p higher to 8988p yesterday.

Mcgann, 68, said: ‘ This will bring together two strong, complementary businesses to create a global leader in online sports betting and gaming.’

it comes amid a period of change in global betting, which has seen a raft of deals amid the rise in online gaming.

Flutter’s merger with TSG follows its takeover of US fantasy sports firm Fanduel and an agreement with casino operator Boyd gaming to roll out its services more widely.

Russ Mould, investment director of AJ Bell, said: ‘ This will enable Flutter to capitalise on the relaxation of laws on sports betting in America, which is now legal in 11 states, with seven more primed.’