Paddy Power and Betfair reach agreement on merger terms to create €7.5bn betting giant
Irish betting giant Paddy Power and UK firm Betfair have reached an agreement on the terms of a planned €7.5bn merger between the two companies.
The merger, details of which were first announced in August, will see the two betting giants come together in an all-share deal.
The two companies have combined revenues of £1.2bn (€1.7bn).
Paddy Power shareholders will own 52pc of the merged business, with Betfair shareholders owning the remainder.
Paddy Power shareholders will also receive a special dividend of €80m immediately prior to the transaction closing.
The merger should be completed in early 2016, assuming it encounters no competition hurdles.
In a statement the released earlier today the companies said: "The boards of Paddy Power and Betfair are pleased to announce that they have reached agreement on the terms of a recommended all-share merger of Paddy Power and Betfair.
"It is proposed that the merger will be effected by way of a court-sanctioned scheme of arrangement of Betfair under Part 26 of the Companies Act. It is proposed that the merged entity will be called "Paddy Power Betfair plc"
Paddy Power Betfair will be headquartered in Dublin and is expected to maintain a significant presence in both Ireland and the United Kingdom.
The boards of Paddy Power and Betfair believe that the combined group will be able to achieve recurring annual pre-tax cost synergies of approximately £50m over two years following completion of the deal.
The two boards also expect to incur a one-off cash integration cost of approximately £65m during integration.
betfair chief executive Breon Corcoran will become CEO and an executive director of Paddy Power Betfair while Paddy Power's CEO Andy McCue will become the company's COO and an executive director of the merged firm.