Paddy Power and Betfair have agreed on the terms of a recommended £5b all-share merger, creating a new FTSE 100 betting giant.
Paddy Power Betfair will have combined annual revenues of more than £1.1b, bringing together Paddy Power’s 336 retail betting shops in the UK and 252 stores in Ireland with Betfair’s online betting exchange.
The merger, details of which were first announced last month, will result in Paddy Power shareholders owning 52% of Paddy Power Betfair and Betfair shareholders owning 48% on a fully diluted basis.
Paddy Power shareholders will receive a special dividend of €80m just before the deal closes.
“The merger of Paddy Power and Betfair will create a company of world-class capability and people who will deliver substantial up-front synergies and a platform for very exciting business expansion,” said Gary McGann, the chairman of Paddy Power, who will become the chairman of Paddy Power Betfair. The combination of Breon, Andy and their colleagues in this merger of equals comprises “the A team” in the business with the ambition to create a unique global player in a very dynamic industry.”
When the deal is complete, Breon Corcoran, who is currently CEO of Betfair, will become CEO and an executive director of Paddy Power Betfair while Paddy Power’s current CEO Andy McCue will become the company’s COO and an executive director of the merged firm.
Paddy Power Betfair will be headquartered in Dublin and is expected to maintain a significant staffing presence in both Ireland and the UK.
The newly merged group will have customers from more than 100 countries, with aims for further international expansion across continental Europe, the US and Australia.
Although no decisions have been taken, the firms today also warned of job losses under plans for around £50m in annual cost savings after the merger.
Shareholders are expected to vote on the deal in December, with the merger due to complete in the first quarter of 2016.