Amaya And William Hill in Merger Talks

Last year saw a number of high profile mergers between some of the world’s biggest gambling companies, including Ladbrokes and Coral, Paddy Power and Betfair, and GVC and Bwin.Party. In the meantime, William Hill looked like it may have missed the opportunity to improve its strategic diversification position after its failed attempt to buy 888, but the British bookmaker now appears ready to deal a major counter-punch to its rivals by seeking a potential stock merger/acquisition with Amaya.
On the face of it, the deal seems like a match made in heaven as online poker giant Amaya, the owner of PokerStars, is struggling to grow its sports book, a vertical in which William Hill has a strong presence, while William Hill has been experiencing difficulty improving its online offering, an area which Amaya has excelled in over the years. Last week, William Hill and Amaya released a joint statement laying out their strategic plans, and as an extract from the press release explained:
“The potential merger would be consistent with the strategic objectives of both William Hill and Amaya and would create a clear international leader across online sports betting, poker and casino.”
In 2015, Amaya generated C$1.4 billion in revenues, with online poker accounting for 78% of that total, and online casino and sportsbook just 17%. By comparison, last year William Hill generated £1.59 billion, with its retail operation accounting for 56% of revenues (£889.5m), and its online product 35% (£550.7m). Moreover, William Hill is predominantly reliant on the UK market, and its plan to merge with Amaya appears to tie in nicely with elements mentioned in the company’s H1 2016 report, which stated:
“The Group’s strategy is to diversify our sources of revenue internationally, thereby reducing our reliance on the UK market and the impact of any fiscal, regulatory or economic changes. Today, 84% of revenues come from the UK and 16% from our international businesses, with more work to be done to take a more focused approach to international growth.”
Whether the deal will eventually go ahead remains to be seen, though, especially as any agreement will ultimately require the backing of the companies’ respective shareholders if it is to go through.

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