FTSE100 betting group Paddy Power Betfair (PPB), has confirmed that it will create a new US-facing subsidiary, joining forces with daily fantasy sports operator FanDuel.
Updating the market this afternoon, PPB governance confirms that it will merge its Betfair US division with FanDuel’s enterprise, as the company seeks to accelerate its position within the newly opened US market.
The new subsidiary will consist of Betfair US’s racing and wagering properties, valued at $600 million, with PPB further contributing $158 million in cash to secure a controlling 61% stake in the US business venture.
“The transaction strengthens the Group’s opportunity to target the prospective US sports betting market through the addition of a strong brand, large existing customer base and talented team. The scale of the combined business also means it is well positioned in discussions with providers of market access for sports betting” detailed PPB in its market update.
PPB will have operational control of the business, which will act as a consolidated subsidiary. The FTSE betting group will further hold the right to appoint the enterprise’s CEO and the majority of the Board of Directors.
PPB’s interest in FanDuel was initially reported last week, with news sources detailing that the FTSE operator was in the advanced stages of putting forward an opening offer to acquire FanDuel outright.
Peter Jackson, CEO of Paddy Power Betfair, commented on the transaction:
“We are excited to add FanDuel to the Group’s portfolio of leading sports brands. This combination creates the industry’s largest online business in the US, with a large sports-focused customer base and an extensive nationwide footprint.
The Group has leading sports betting operating capabilities globally and strong operations on the ground in the US. Together with our substantial financial firepower, we believe we are now well placed to target the prospective US sports betting opportunity.”