Flutter signs $ 4 billion deal to acquire 95% of FanDuel

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Flutter signs $ 4 billion deal to acquire 95% of FanDuel
Photo: Proactive Investors

Flutter Entertainment signed a $ 4.18 billion deal to gain majority control of FanDuel, increasing its stake in that company to 95% and ending Fastball’s presence on the online sports betting platform FOX Bet.

The settlement sets FanDuel’s value at $ 11.2 billion. Flutter, which owns Paddy Power Betfair, which merged with FanDuel in 2018, said it would execute an early buy option to acquire 37.2% of Fastball with a combination of cash and shares.

The contract also leaves open the possibility of a greater involvement of the American FOX Sports, of Fox Corporation, with the option to buy 18.5% of FanDuel in July 2021. Fastball will have 7% of Flutter after the conclusion of the deal . And Boyd Interactive Gaming will own the remaining 5% of FanDuel’s shares.

“By taking ownership of Flutter, we demonstrate our long-term commitment to this company and our confidence in the ability of its managers to take advantage of opportunities in the growing US market,” said Lachlan Murdoch, president and CEO of Fox Corporation.

He added: “The FOX audience has proven to be very involved with games, betting and free game content. And, we are excited to offer access to products from the Flutter group.”

Details of Flutter operation

Flutter said it would raise $ 1.48 billion in capital to partially finance the purchase, and Fox Corporation will also participate. Recalling that Fox owned 2.6% of Flutter Entertainment before the transaction.

“We gave Fox the option to acquire a portion of the company in July 2021 at market price, and that option remains in effect. We will continue to talk to see if they are interested in taking advantage of this or not, “said Flutter CEO Peter Jackson.

According to Flutter, the deal will simplify the position of FOX Bet, a company from which Fastball received a percentage as part of the merger of Flutter with Canadian The Stars Group in 2019. The merger resulted in the creation of one of the largest online betting operators of the world.

“We are going to increase our exposure to the US market at a time when the regulation of sports betting and online games is accelerating,” said Jackson.

Flutter plans to pay through a combination of $ 2.09 billion in cash and the issue of approximately 11.9 million new shares directly to Fastball.

Expectations for the US market

By the end of 2021, Flutter expects its online sports betting products to be available in states where a third of the US population lives. The country is considered the next high-growth market for sports betting.

That expectation is spawning a series of deals, such as the $ 2.9 billion settlement between Britain’s William Hill and Caesars Entertainment announced in September.