This week both Paddy Power and Betfair shareholders have approved of a merger between the two companies. This 6 billion pound all-share merger will create Paddy Power Betfair, which will be one of the world’s largest online betting and gaming companies.
After the merger is complete, Paddy Power shareholders will own 52%, and Betfair shareholders will own 48% of Paddy Power Betfair.
There will also be a special dividend of €80 million divided between all current Paddy Power shareholders.
The new Paddy Power Betfair headquarters will be in Dublin, from where it will continue to service both companies’ Ireland and UK customers.
Breon Corcoran, the current CEO of Betfair, will become CEO of the new merged Paddy Power Betfair. The current CEO of Paddy Power, Andy McCue, will be the new company’s COO as well as an executive director.
Paddy Power has hundreds of shops across the UK and in Ireland, which, when combined with Betfair’s online betting exchange, will make the new Paddy Power Betfair a force to be reckoned with.
80% of their combined annual revenue will be from online gaming alone. Once combined, the company will have customers in over 100 countries, with goals of further expansion across Europe, the US, and Australia.
The merger has already been approved by the UK’s competition and market authority, and it is expected to be approved by Irelands Competition and Consumer Protection Commission (CCPC) soon as well.
According to Paddy Power’s current CEO Andy McCue, the combined group will be the biggest online business anywhere in Europe. Total annual revenue should be around €1.5 billion.
As for the CCPC, McCue said, “we’re hopeful of getting a positive outcome. Our expectation is that the deal will close in the first quarter of next year. We have good on-going dialogue with the CCPC, but obviously they have to complete their own investigation.”
As the merger is finalized, Paddy Power Betfair will be spending close to €90 million to reduce company redundancies. They believe that this will achieve total annual savings of around €70 million.
According to McCue, the final integration plan has not yet begun, but it will certainly be something they will focus on after the merger is officially completed during the first quarter of 2016.
“Our focus at the moment is on running the businesses as hard as we can versus the competition, and we’ll continue to do that right up to the date of completion,” he said.