Blockbuster merger of Sky Bet and Paddy Power Betfair owners given green light

  A monster merger between Paddy Power and Betfair owner Flutter Entertainment and The Stars Group, owner of Sky Bet, was on Tuesday given the go-ahead by the UK's competition watchdog. 

The Competition and Markets Authority (CMA) cleared Flutter's £10 billion purchase of Stars after opening an investigation into the deal, which was agreed in October, at the start of February. 

The CMA found punters would not receive less favourable odds or fewer promotions as a result of the tie-up due to strong competition for customers from rivals such as William Hill and bet365.

Flutter chief executive Peter Jackson said: "This is an important milestone in 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 continue to make good progress in our post-completion planning."

Flutter and Stars hope the deal will save £140m in costs once it completes in the second quarter of this year and they have targeted the US as an area for expansion amid tighter regulations in the UK. 

Other regulators have offered their conditional approval for the merger, although timescales have been delayed due to the coronavirus outbreak. 

The approval provides some reprieve for Flutter after short-sellers targeted the firm amid the ongoing coronavirus fallout on UK stocks.

'Competition is important'

The Horserace Bettors Forum responded to the CMA announcement with a warning that the coming together would not be good news for punters. 

HBF chairman Colin Hord said he feared the merger would make it harder to find value in betting markets.

"Competition is important in the world of betting," he said. "The more choice for punters the better.

"If there are fewer companies to bet with and fewer different prices it makes it harder to find a bit of value. We've seen that with Ladbrokes and Coral using the same prices and the same with Betfair Sportsbook and Paddy Power. It's harder to get an edge."   

Flutter Entertainment's share price closed on Tuesday evening at 7,288p, up almost ten per cent on the day but still down from a recent high of 9,052p on February 21.