Australian competition authority approves merger between Flutter and Stars

The Australian competition authority has given the merger between Flutter and The Stars Group the green light.

The Australian Competition and Consumer Commission (ACCC) has approved the proposed merger between Flutter Entertainment and The Stars Group (TSG).

This news comes after the UK Competition and Markets Authority (CMA) announced plans to investigate the merger between the two gambling companies. Any parties that are involved in the deal were invited to submit comments by 18 February.

Although the merger has been approved by the ACCC, Flutter and TSG must still gain approval from the Australian Foreign Investment Review Board and several other international regulatory bodies.

Regulatory approvals

The merger is subject to both regulatory and authority approval from several bodies including the London Stock Exchange, FCA and Euronext Dublin as well as regulatory approval in the UK, Ireland, US, Canada and Australia.

As well as receiving regulatory approval from the necessary authorities, Flutter and TSG shareholders must also approve the merger. For the merger to proceed, at least 66% of TSG shareholders must vote in favour of the deal

Flutter and TSG have said that should the merger receive approval from all the necessary authorities and Shareholders, they hope to finalize the deal in either Q2 or Q3 of 2020.

Merger details

Under the deal, Flutter will exchange 0.2253 new shares for each share of TSG. Flutter shareholders will own about 54.64% of shares in the new combined business while TSG shareholders will hold the remaining shares. The merged company will continue to operate under the Flutter Entertainment name.

The companies hope to deliver substantial value creation for shareholders from pre-tax cost synergies of £140 million per annum and potential revenue cross-sell in international markets and lower finance costs.

Once Flutter finalizes its purchase of TSG it will form a combined business with an annual revenue of $4.7bn (£3.8bn). When the deal was made, Flutter said the merger would create the largest online gambling company on the planet.

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