ACCC Gives Approval to Flutter – Stars Group Merger
Back in October, the gambling world learned of the mega-merger between The Stars Group and Flutter Entertainment. The merger will create the largest online gambling company in the world. The new company will offer services over multiple platforms, including online casino gaming.
The merger recently received a vote of approval from the Australian Competition and Consumer Commission (ACCC). The organization has given informal approval of the merger, but it is just the first step in a long series of approvals needed by the company prior to the deal becoming finalized.
Australia Competition Committee Approves Deal
According to various reports, the Australian Competition and Consumer Commission has given informal approval of the merger of Flutter Entertainment and The Stars Group. The Stars Group operates PokerStars, the largest online poker site in the world along with a successful online casino. Flutter Entertainment is the owners of Paddy Power.
— CPI (@CompPolicyInt) February 19, 2020
This is the first of two major approvals necessary in Australia. The merger is still seeking approval from the Australian Foreign Investment Review Board. Few see that there will be an issue for receiving approval. However, there are other countries whose regulatory bodies may not be as welcoming.
Deal Could Hit Snag in the UK
This merger still requires the approval of various regulatory bodies around the world, and the one that may be the most problematic is the UK Competition and Markets Authority. The Authority has already opened a probe into the merger, seeking to determine whether the merger will hurt competition in the UK market.
Brands operated by the two companies have a combined 26 percent of the market share for overall online gambling. The company operates PokerStars, SkyVegas, and other gambling companies in the region.
Some analysts suggest that the two companies will have to shed some weight before receiving final approval. Some feel that Flutter may need to sell their Paddy Power brand as a way to appease regulators.
Should the merger find a way to clear regulatory hurdles in the UK, there is a good chance that other regions will quickly give their approval. The UK is easily the toughest region to receive regulatory approval. If the merger clears that hurdle, the rest should be smooth sailing.
$6 Billion Deal to Close in Q2
For those not already familiar with the terms of the deal between Flutter Entertainment and The Stars Grou, the company will merge in an all-stock deal worth approximately $6 billion. After the merger, stockholders will be 54.64 for Flutter Entertainment and the other 45.36 percent will be holders of The Stars Group.
After the deal closes, the new company Board will consist of members from both boards from the previous companies. Current Chair of Flutter Entertainment Gary McGann will become the new Chair. Flutter CEO Peter Jackson will become the new company’s CEO. Flutter CFO Jonathan Hill will become the new company’s CFO. Rafi Askenazi is The Stars Group’s current CEO and will become the COO of the new company.
Provided that the company is able to pass regulatory approval from various groups, the deal will close sometime in the second quarter of 2020.
Shareholder Approval Forthcoming
The other piece of the puzzle that needs to be completed is shareholder approval. Shareholders must still vote to approve the measure and this voting will happen in Q2. This will lead to the finalization of the deal sometime during Q3 of 2020.
We still don’t know the name of the new company. We assumed that information to have been leaked before now. Even if the companies drop Paddy Power to clear regulatory hurdles, the deal will still make the new company the largest global online casino and gambling company.
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