Flutter Entertainment Gunning for International Glory Following TSG Merger

Dublin-based Flutter Entertainment is looking to spread its influence outside of Europe following a major merger with The Stars Group (TSG).

Flutter Entertainment

Flutter Entertainment will become the largest online gaming company in the world after merging with The Stars Group. (Image: Flutter Entertainment)

News of the multi-billion-pound merger broke on October 2 and instantly pushed up the share price of both companies.

According to the announcement, the deal will be a non-cash transaction facilitated by an “all-share combination.” Once complete, Flutter Entertainment shareholders will own a 54.64 percent stake in the new company, while TSG will hold 45.36 percent.

Flutter Entertainment Becomes Industry Behemoth

Based on 2018’s combined earnings of £3.8 billion, the new entity will become the largest online gaming company in the world.

For both, the merger is a chance to “turbocharge” existing products and gain traction in new markets according to Flutter CEO Peter Jackson.

As the parent company of Paddy Power and Betfair, Flutter already has a strong base in the UK and Europe. However, with underlying profit before tax down by 24 percent according to its latest interim report, international growth is necessary.

On its own, TSG has a global presence. As the owner of PokerStars, its reach stretches far beyond that of any other operator in the industry.

However, it will be TSG’s recent partnership with US TV network FOX Sports that could prove the most lucrative.

Consolidation Opens Up US Connections

With British operators looking cross the Atlantic and take advantage of new sports betting rules, connections to a major broadcaster are invaluable.

The combination represents a great opportunity to deliver a step change in our presence in international markets and ensure we are ideally positioned to take advantage of the exciting opportunity in the US through a media relationship with FOX Sports as well as our development of US sports betting through Flutter’s FanDuel and TSG’s FOX Bet brands,” Jackson said on October 2.

Local competitors GVC and William Hill have already made a mark in the US but even they have only scratched the surface. As more states regulate sports betting and, in turn online gaming, opportunities will increase.

By merging with TSG, Flutter Entertainment will be stronger position to take advantage of these market changes.

Beyond their own personal fortunes, the Flutter/TSG merger could act as a catalyst for further change. As news of the deal went live, share prices for GVC and William Hill rose in anticipation of further consolidation.

Quite where the next deal might occur isn’t clear at this point. However, the online gaming market appears to be in another state of flux and that could lead to further mega mergers in the coming months.

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