Betfair and Irish rival Paddy Power have reached agreement on a 6 billion pound ($9.2 billion)combination, first set out last month. As Sonia Legg reports, it's designed to secure leadership of Britain's competitive online gambling market.
They're gambling on being the market leader online in Britain. Betfair and Irish rival Paddy Power are joining forces in a 6 billion pound deal. Paddy Power shareholders will own 52 percent of the group - and both firms are recommending approval. It's the latest in a string of tie-ups in the sector this year as companies respond to tighter regulation and higher tax bills. Ladbrokes and Gala Coral struck an all-share deal in July, and a month later GVC Holdings agreed to buy Bwin.party Digital Entertainment. The deals are also a response to a growing mobile and tablet market - Betfair is an exclusively online business that allows gamblers to bet against each other instead of taking odds from a bookmaker. It'll receive 0.4254 new shares in the combined group in exchange for each Betfair one. While shareholders in Paddy Power - which operates almost 600 betting shops and Britain and Europe - will share an 80 million euro dividend. The new group will be called Paddy Power Betfair and will have a 16 percent share of the UK online market.