Betfair and Paddy Power owner Flutter Entertainment PLC’s (LON:FLTR) merger with Canada’s online poker giant The Stars Group (NASDAQ:TSGI) is to be investigated by the UK competition watchdog.
The pair agreed an all-share merger in October that, if completed, will create the world’s largest online betting and gaming operator, with combined revenues of £3.8bn and total market capitalisation of more than £11bn at current share prices.
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Britain’s Competition and Markets Authority said on Wednesday that it launched an inquiry overnight to determine if the merger will result in “a substantial lessening of competition” in the UK.
The CMA set a deadline of 31 March by which it will decide whether or not to refer the merger to a deeper ‘Phase 2’ investigation.
Dublin-headquartered Flutter’s UK brands are predominantly Paddy Power and Betfair, while Stars owns Sky Bet and associated Sky Casino and Sky Poker, together with big online poker brands PokerStars and Full Tilt, and the Oddschecker betting comparison website.
Analysts at broker Davy said the CMA review was expected and the timing was consistent with the timetable indicated by Flutter, suggesting the deal was on track to complete by the third quarter this year unless any issues are brought up by the investigation.