The U.K. Competitions and Markets Authority approved the merger between The Stars Group and Flutter Entertainment the first step in the acquisition review.
Last October, the two companies agreed to create what would become the outright global market leader.
“This announcement from the CMA marks a further important milestone in the process towards completion of our proposed combination with The Stars Group,” said Flutter Chief Executive, Peter Jackson. “We continue to work with the remaining international regulatory authorities to obtain the last of the outstanding approvals.”
Jackson will lead the combined group, while former Sky Bet CEO Richard Flint will also sit on the board.
Shareholders from both companies will vote on the merger later this month, according to SBC News.
In a statement, TSG said: “The Stars Group and Flutter continue to work diligently towards completion.”
The additional regulatory agencies which need to approve the combination may delay the time frame given the coronavirus crisis. In addition to shareholders, the two firms require approval of the Ontario court, the United Kingdom Financial Conduct Authority, London Stock Exchange and Euronext Dublin, among others.
The two parties expect the deal to close in the second or third quarter of the year.
The key focus of the CMA investigation was to determine whether customers who place bets online would be offered less favorable odds, less generous promotions or poorer quality products. The CMA found no concerns.
In a second phase of the investigation, the CMA will determine whether the 40 percent control of the U.K. online betting will be an issue as it is significantly above the 25 percent regulatory guidance.
Flutter admitted the global COVID-19 disruptions will have an impact on the financial profile of the combined group. But the companies say the stronger cash generation, scale and combined synergies will help outride those factors.
The merger will create a powerful combination in the U.S. online gambling market, where FanDuel and PokerStars are major brands, according to 888Poker. FanDuel has grown from its roots as a fantasy sports company to become the single biggest online sports betting operator in the U.S. PokerStars, meanwhile, is currently the only online poker site serving Pennsylvania, where business thrives.
