Doubts Raised over Flutter Merger with Stars 

The high profile merger between Flutter Entertainment and the Stars Group, which was announced at the start of the month may not run smoothly, according to reports from the financial world.  

The merger proposal grabbed headlines when it was announced on October 2, and since then, the CEO of Flutter, Peter Jackson and his team have been bullish about their chances of clearing all of the regulatory barriers to make the merger happen.  

If approved, the combination of the two companies would be worth somewhere in the region of £10 billion, and would represent 40% of the UK gambling market, bringing together Skybet, Paddy Power and Betfair, while in the US it would also include Flutter’s US fantasy sports and sports betting company Fan Duel, and it has also been reported that Flutter would be in line to conclude deals with Fox Sports, Fastball Holdings and Boyd Interactive if the merger goes through.  

But some city analysts are sceptical that the merger will be approved by regulatory bodies. Over the weekend, Canadian analysts at Canaccord Genuity said that the merger would lead to regulators in the UK asking questions about customer choice when it came to online sports and casino betting, while the potential breaking up of Paddy Power could also prove controversial after Jackson had pledged to return the bookmaker to growth when taking over in 2018.   

Analysts have also suggested that the Australian Competition Tribunal or the Australian Competition & Consumer Commission could launch a probe into the merger for its potential impact in the Australian market, given that the new entity would have control of leading online betting company Sportsbet.com.au and BetEasy.  

Flutter have said that they hope to complete the merger by the second or third quarter of 2020, but that could turn out to be too ambitious a target given the obvious scope for regulatory investigation.  

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