The UK competition gambling authority has given approval to the mega-merger of gambling giants of Flutter Entertainment and the Stars Group following a probe into the proposed deal.
As a result of the probe, Flutter’s £10-billion acquisition of the Stars Group was cleared by the Competition and Markets Authority (CMA). The investigation into the planned merger was announced at the beginning of February 2020.
The probe found that despite the strong competition of gambling operators would not result in less favourable odds or less generous promotions to be provided to customers as a result of the agreed merger.
According to reports, the major rivals in the sector are GVC Holdings, bet365, William Hill, and Coral. The watchdog shared in a report that the CMA found that regardless of the fact that the merging companies are close competitors in the UK gambling sector, other rivals are operating in the market, too, so the merger is unlikely to deteriorate the offers received by players who choose to bet online.
As it has previously been revealed, Flutter Entertainment and the Stars Group have been hoping their merger results directly into achieving an overall of £140 million of cost synergies, once the deal is finalised in the second quarter of fiscal 2020.
The Two Gambling Giants Aim to Expand Presence in the US Sports Betting Market
Apart from that, the two gambling companies have been also willing to expand their presence into the US gambling market, where sports betting has already been legalized and most states have already relaxed their laws to allow sports betting to be offered to their residents. The opening of a new and promising market has ended up creating a new area of expansion for British gambling companies at a time when they are facing stricter regulatory rules in their domestic market.
Peter Jackson, CEO of Flutter Entertainment, confirmed that the CMA cleared the path for the two companies’ planned merger and described the approval as an important milestone in the process towards finalisation of the proposed tie-up with the Stars Group. He further noted that the companies would continue to collaborate with the remaining international regulators to get all the necessary outstanding approvals of their deal.
Mr Jackson also explained that both Flutter Entertainment and the Stars Group have already separately published the required documentation ahead of their shareholders votes scheduled in April, and the post-completion planning is still making some good progress.
Other regulatory bodies have already offered their conditional approval to the deal, but timescales have been delayed because of the recent Covid-19 crisis.
The CMA approval of the desired merger provides Flutter Entertainment with some reprieve following short-sellers targeted the company amid the ongoing lockdown due to the coronavirus breakout that hit UK stocks hard.