Competition regulator investigates Paddy Power Betfair merger

Competition regulator investigates Paddy Power Betfair merger

Wednesday, November 11, 2015 Totally Gaming
The merger would create a £5bn company

Paddy Power’s proposed £5bn (€7.1bn/$7.6bn) merger with Betfair is the subject of an investigation by the UK’s Competition and Markets Authority (CMA).

The regulatory body will look at the deal, which was initially unveiled in August, and make a Phase 1 decision upon it by January 7, 2016. A more detailed Phase 2 investigation could then be instigated.

The CMA has published an invitation to comment on a merger that would create a combined company with annual revenues of more than £1.1bn and an online market share of 16 per cent in the UK – above the 14 per cent of a merged Ladbrokes-Coral group as well as William Hill and Bet365.

The CMA said that it is “considering whether it is or may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the UK for goods or services”.

The CMA is a non-ministerial government department “responsible for strengthening business competition and preventing and reducing anti-competitive activities”.

Under the terms of the all-stock merger, Paddy Power would own 52 per cent of the group, with Betfair shareholders controlling the remaining 48 per cent. The companies said that the deal would achieve recurring annual pre-tax cost synergies of approximately £50m.

Meanwhile, TotallyGaming.com has learned that Ladbrokes and Gala Coral are in preliminary talks with the CMA about their proposed merger, with an investigation almost certain to take place.
 

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