The talk of online gambling land today is the announcement from Paddy Power and Betfair that the two already very large online gambling businesses, have reached an in principle agreement to join forces and become one extremely large online gambling business.
The combined entity, to be called Paddy Power Betfair plc, will have revenues (based on most recent years results) of around £1.1 billion (€1.5 billion) and a value somewhere around the €7-8 billion mark based on current market capitalization of the respective companies – both of which shot up around 20% on the merger news.
Betfair plc shareholders will end up owning 48% of Paddy Power Betfair plc. Paddy Power plc share holders get the other 52% plus an €80 million special dividend once the deal is done.
Paddy Power CFO, Cormac McCarthy described the deal to Reuters as, “a very attractive opportunity, the scale and capability is unsurpassed and would leave us in a much better place to compete in our current markets where competition is intense”, giving the combined company a “market leading position” in the UK, Ireland, Australia and the US.
He did also say that, “at the moment it’s just a possibility and there’s a lot to be done in the coming weeks and months.”
Included in the announcement are the key appointments to the merged entity:
- Paddy Power Chairman ,Gary McGann becomes Chairman;
- Betfair CEO, Breon Corcoran will be CEO;
- Paddy Power CEO, Andy McCue will be COO; and
- Betfair CFO, Alex Gersh will become CFO.
No mention of Cormac. Perhaps securing his position in the new business is one of those things still to be done in coming weeks and months.
Paddy Power and Betfair brands live on
The deal will create a single corporate entity, but not a single operating brand.
A ‘dual brand strategy’ in Europe will mean that the Paddy Power and Betfair brands and websites will live on from an operational point of view. It follows from this that it will be a long time, if ever, before Paddy Power live casino and Betfair live casino becomes Paddy Power Betfair live casino. Hopefully they’ll shorten the name before that ever happens.
Finally, to those who thought Paddy Power’s marketing was all tongue in cheek, here’s a tweet they put out a month ago in response to the Ladbrokes/Coral merger announcement.
Hot on the heels of the Ladbrokes/Coral merger, we can exclusively reveal that we have merged with Betfair. Our new name is Betty Power.
— Paddy Power (@paddypower) July 24, 2015