CMA approves Flutter-TSG union.
Flutter Entertainment's merger with The Stars Group (TSG) has been given the nod by the UK's market regulator, the Competition and Markets Authority (CMA). This Union could create the largest listed gaming organisation globally, but several more approval processes need to be completed before it happens. Will the deal go forward?
Pending Approvals
The CMA has granted "unconditional first phase approval" for the proposed merger between Flutter and TSG. This means that Flutter will own every share in TSG. The merged firm has an annual revenue totalling around €4.3 billion.
Flutter's CEO, Peter Jackson, commented on the approval, stating it's another significant milestone for the company. Shareholder approval is still necessary at Flutter's extraordinary general meeting on April 21, while TSG's vote will take place on April 24.
The transaction also requires regulatory approval from the British Financial Conduct Authority (FCA), the London Stock Exchange, and Euronext Dublin. These authorities have mentioned a possible delay in processing due to the ongoing Covid-19 pandemic. Jackson remains confident in the merger's progress, indicating in a statement to iGamingBusiness, "We continue to work with the remaining international regulators to secure the last of the outstanding approvals."
Motive for Investigations
Flutter and TSG's merger plans have stirred a lot of debate in the gambling sector, as they'll create the largest listed gaming firm. The union would also make them one of the leading online gaming providers. Three of the seven major British brands for online sports betting would come under this new entity.
Flutter includes popular bookmakers such as Paddy Power, Betfair, Sportsbet, and the US fantasy sports provider, FanDuel. TSG, on the other hand, owns betting companies like SkyBet, BetStars, and Oddschecker. They also own the two largest poker networks, Full Tilt Poker and PokerStars.
Such a significant market presence brought attention from the local market authorities, who raised concerns about possible competition distortion. The CMA's investigation aimed at determining the merger's effects on the UK gambling market.
Non-Existent Market Distortion
Surprisingly, despite all the speculation, the CMA concluded that customer choice would not be negatively impacted due to the merger. UK gamblers will still have enough options, and competition would not be adversely affected. Companies like bet365, Ladbrokes' owner GVC, and the London betting stalwart, William Hill, were cited as competing options.
The CMA's decision was based on evidence gathered during the investigation. The authority consulted with some international regulators in the USA, Germany, and Austria for their conclusions. These authorities also approved the merger.
Had the investigators reached an unfavourable conclusion, the combined company may have been forced to sell some flagship brands—a likely candidate being Paddy Power. However, the approval announcement suggests this issue is no longer a concern. However, the final checks are yet to be completed.
Established Management Team
The new firm's management structure has preliminary plans. Flutter and TSG announced last week they'd agreed on a management team. Jackson will take over as CEO, while Divyesh Gadhia, currently TSG's CEO, will become the Group's Deputy Chairman post-merger.
The new management team is set to include a 14-member board comprising members from both companies' shareholders. Ashkenazi, the outgoing TSG CEO, will serve as an advisor to Flutter and join the board in a non-executive capacity. Initially, he was supposed to be the new COO. He played an integral role in driving the merger forward.
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Source: www.onlinecasinosdeutschland.com
