The mega-merger between The Stars Group and Flutter Entertainment has received unconditional “phase one“ clearance from the UK Competitions and Markets Authority (CMA).
Last October, the two companies agreed that the Paddy Power owner will acquire all of the shares in TSG to create with the PokerStars operator the largest online betting business by revenue on a global scale.
Another Important Milestone
Subject to numerous approvals, the merger of two industry giants has waited for the green light from the FCA, London Stock Exchange, Euronext Dublin, as well as respective gaming control bodies in the UK, Ireland, Australia, the US, and Canada.
While the go-ahead from the Australian Competition and Consumer Commission (ACCC) was received in February, the CMA said yes to this combination on Tuesday under the Enterprise Act 2002.
Commenting on the announcement, Peter Jackson, Flutter Chief Executive, said: “This morning’s announcement from the CMA marks a further important milestone in the process towards completion of our proposed combination with The Stars Group.
“We continue to work with the remaining international regulatory authorities to obtain the last of the outstanding approvals. Separately last week we published the necessary documentation ahead of the shareholder votes in April and we continue to make good progress in our post-completion planning.”
The proposed transaction, however…
…is yet to be approved by Flutter shareholders at its extraordinary general meeting on 21 April 2020 while TSG shareholders are going to do it on 24 April 2020. In addition to that, the UK Financial Conduct Authority, London Stock Exchange and Euronext Dublin still haven’t cleared the merger.
Entering Phase 2
After the CMA investigated the eventual consequences of the deal, it found that the highly competitive betting market won’t let the merger to worsen the offering to players in terms of quality of products, odds, and promotions. Therefore, after successfully completing “phase one,“ the Flutter-TSG combo will now enter „phase two“, during which the CMA will have to consider the impact of the deal’s 40% uptake of the UK online betting market.
Somewhat earlier, Flutter stressed…
…that its multi-billion pound merger with TSG is going according to plan, although the group has to conduct certain COVID-19 adjustments. Last week it became official that two parties agreed Divyesh Gadhia (current executive chairman of TSG) will act as deputy chair of the group upon the merger completion. In his turn, TSG chief executive Rafi Ashkenazi will become a consultant to Flutter, joining the board in a non-executive role.