Merger will create world's largest online gambling company
Bwin and PartyGaming, the listed owners of the Ongame Network and PartyPoker, have announced their intention to merge creating a $3+ billion online gaming giant.
Rumours of the merger have been circulating since last year, but the offical announcement today still surprised some analysts following talk of a break-down in negoatiations.
Bwin will become the majority owner with 51.64% of the shares in the new firm, which will be listed on the London Stock Exchange.
PartyGaming's current CEO Jim Ryan will become co-CEO with Bwin's Norbert Teufelberger and the firm is expected to save €55 million a year as a result of synergies.
The most obvious synergy will be in poker where the increase in liquidity will make the combined room far more competitive in its battle with the big US-facing firms.
It's unclear at this stage how the liquidity of the two sites will be shared, but PartyPoker looks to be the key brand in the merger statement released to the London Stock Exchange.
The two firms are clearly focused on potential US regulation and stressed how PartyPoker has a database of 12 million players in the US.
It also noted its founder shareholders may be prepared to sell-up to allow the firm to enter the US or other newly regulated markets.
'We will be in pole position to capitalise on the wealth of opportunities that will flow from the continued evolution and expansion of the global online gaming industry,' Norbert Teufelberger said.
The new group will be headquartered in Gibraltar, where PartyGaming is currently based, and the deal is classed as a reverse takeover for PartyGaming with Bwin shares being delisted from the Vienna Stock Exchange.