FanDuel and Paddy Power owner Flutter Entertainment PLC (LSE:FLTR) has agreed a €2.3 billion (£1.9 billion) acquisition of Playtech PLC's (LSE:PTEC) Italian gaming business, Snaitech.
The offer follows confirmation last month that talks were underway between the two.
FTSE 250-listed Playtech said it intended to return €1.7-1.8 billion to shareholders by way of a special dividend "as soon as practicable" after the deal is completed, as well as repaying an outstanding €350 million on its bonds.
Snaitech, better known under its Snai brand, grew revenues by 5% to €946.6m in the last financial year and is the market leader with a 9.9% share of the Italian gaming market.
Flutter boss Peter Jackson stated: "I am delighted to announce the acquisition of Snai, one of the leading players in Italy, Europe's largest regulated market.
“This transaction is compelling strategically and financially. It fits perfectly within our strategy for value creating M&A and creates a significant opportunity to accelerate Snai's growth by providing them with access to Flutter's market leading products and capabilities both in the US and globally.
“I look forward to welcoming the Snai team to the Flutter Group and working with them to maximise the growth opportunity for our combined businesses."
Mor Weizer, chief executive of Playtech, added: "While Snaitech has been an important part of the Playtech Group's growth in recent years, the board agreed that this transaction represents a compelling opportunity to maximise value for our shareholders while also allowing them to share in further upside from continued ownership of a leading B2B business.
"The combination of the Playtech Group's leading technology with its exposure to attractive markets, including in the Americas and Europe, provides a strong platform for growth in the medium-term. We are excited about what the future holds and the many opportunities ahead of us."