United Kingdom – The UK’s Competition and Markets Authority (CMA) has announced that it is currently investigating the proposed merger between Flutter Entertainment plc and The Stars plc.
Flutter Entertainment are the owners of sports betting companies Paddy Power and Betfair among others, while The Stars Group are can number PokerStars and Full Tilt Poker among the brands that they own.
If allowed to merge unchecked, the new company could boast annual revenues approaching $5 billion per annum. This would make it the largest online gambling company in the world surpassing the current industry leaders, IGT in the United States.
The deal was first announced in October 2019. Flutter released the news that they had agreed the purchase of The Stars Group for $6 billion. The deal, they hoped, would be all but concluded by the third quarter of 2020.
The CMA have stepped in to ratify the deal and to assess its impact on competition, economics and employment. They have until the end of March 2020 to decided whether the deal needs to go through a more stringent process of analysis.
It is unlikely that the CMA will block the deal from going ahead, but they could make demands upon certain aspects of the deal to make sure it does not make too major an impact upon rival companies.
The CMA did the same while ratifying the deal in the UK between Ladbrokes and Gala Coral. The new company was forced to sell 400 of its real-world betting shops before the merger was green lit.
There is always the chance that conditions placed upon the deal could make it a less attractive one for Flutter Entertainment. To prevent further legal issues should this happen, Flutter have agreed to pay The Stars Groups £60 million should they decide that they no longer wish for the deal to go ahead.