Regulators yet to clear Paddy Power owner Flutter’s €12bn merger
Dublin-headquartered Flutter plans to merge with Canada-based Stars Group
Flutter described approval by the UK mergers regulator as a ‘significant milestone’ in the deal’s progress. File photograph: PA
Dublin-headquartered Flutter plans to merge with Canada-based Stars Group, which owns online poker businesses and Skybet, in a transaction that will create a business worth a potential €12 billion.
In a statement, Flutter said that it noted the UK’s mergers regulator, the Competition and Markets Authority (CMA), had given the deal unconditional clearance.
The Competition and Consumer Protection Commission in the Republic has yet to approve the merger, which was notified to the regulator in January.
Flutter and Stars are also waiting on Australian authorities to approve their tie-in. The country’s Competition and Consumer Commission said recently that it had granted the merger informal approval.
Meanwhile, the Australian Foreign Investment Review Board must also back the transaction.
The UK authority’s move means the deal has cleared a significant regulatory hurdle.
Some observers believed that the proposed Flutter-Stars merger faced strong scrutiny by the CMA, as Skybet has a substantial presence in the UK, alongside Paddy Power and Betfair, another of the Irish group’s key subsidiaries.
The Canadian player also owns the Full Tilt Poker and Poker Stars websites. It has a customer and technical support office in Cherrywood, Dublin.
Flutter noted that its shareholders had to approve the deal at an extraordinary general meeting on April 21st, while Stars Group investors would vote on it three days later.
Flutter chief executive Peter Jacksondescribed the CMA’s approval as a “significant milestone” in the deal’s progress.
“We continue to work with the remaining international regulatory authorities to obtain the last of the outstanding approvals,” said Mr Jackson.
He added that Flutter last week published the documents needed for April’s shareholder vote.
According to the CMA, Paddy Power, Betfair and Skybet have combined on-line revenues of £1.5 billion sterling (€1.7 billion) in the UK.
The authority acknowledged that the companies compete closely but said they were among several rivals, so the transaction would not “worsen the offering to people who choose to be online”.
CMA investigators focused on whether punters would get less favourable odds or promotions, or poorer products, as a result of the deal.
They found there was a large number of players in the UK market, including big bookmakers such as Bet365, William Hill and Ladbrokes Coral, which allowed customers to switch accounts easily.
Flutter has suspended plans to pay shareholders a €112.7 million final dividend as horse racing and other sports – on which its customers bet – postpone events in the face of coronavirus.