Bwin PartGaming merger is a go!

Not sure what it’s going to be called, but the entity created from the merger of Bwin and PartGaming will be very, very big.

It becomes quite comfortably the largest pure-play online gambling business in terms of market capitalization  – $3.3 billion based on combined value before the merger was announced and closer to $4 billion now that the share prices have surged post-announcement.  And if HR2267 manages to get up in the US, this value will soar even further, with the company well placed to secure available licenses and enter the US market.

Size matters…

These were two of the industry’s bigger players in there own right, and not just in terms of player numbers, turnover and revenue but also brand presence. Both have invested enormously in growing their brands in Europe particularly – a fact that is readily apparent when you have a look at some of their high profile sponsorship deals.

Bwin have had their logo on the jerseys of FC Barcelona, Juventus Turin, AC Milan, Real Madrid and FC St Pauli as well as sponsoring entire football leagues like Portugal Liga. Beyond football they are global partners to FIBA, MotoGP, Red Bull Air Race, World Equestrian Games and Ski World Cup.

PartyGaming, through its PartyCasino, PartyPoker and PartyBingo brands, has sponsored events like The World’s Strongest Man, The PGA EuroPro Golf Tour, World Pool Masters, the Grand Slam of Darts, and Premier League Snooker.

If you’re a sports fan living in Europe then you’d have to be blind not to be aware of the names Bwin or PartyGaming.

More industry consolidation to come?

This merger looks like it might set of a powder keg of consolidation activity.  In an industry where ‘bigger is better’ other operators are now looking at mergers of their own.  An analyst has told Reuters that,

“The pressure is now on for others to pursue consolidation or risk being left further behind. For 888 consolidation looks imperative and, given the bottom line performance, the group could be pursuing this from a sole position of weakness.”

According to 888.com CEO Gigi Levy they started receiving calls from potential merger partners shortly after the bwin/PartyGaming tie up was announced.

“This puts us in a position in which we are one of the best assets in the field — we got a few phone calls immediately from various people. Everybody in the industry is looking and saying ‘who is the best one to merge with if we need to?’,” he said.

Details of the Bwin / Party Gaming merger including numbers and corporate structure are set out here.