In what has been a long rumored merger in the online gaming industry, it was revealed today by online gaming site Gaming Intelligence and confirmed by a press release that the deal between Austrian-based bwin and Gibraltar-based PartyGaming has finally been completed.
The merger, which is expected to be completed by the first quarter of 2011, will create the largest publicly traded online gaming conglomerate in the industry. According to Gaming Intelligence, the two companies combined to earn €682 million (approximately $892 million U. S. dollars) in 2009, with extensive reach into many areas of the online gaming industry including online poker, sports betting and bingo. The merger does have some hurdles to completion, one of which is the approval of 75% of each company’s stockholders.
“This is a transformational opportunity for both our companies to create the world’s largest listed online gaming business,” PartyGaming Chief Executive Officer Jim Ryan says in the press release and the Gaming Intelligence story. “With market leading positions in poker, sports betting, casino and games – in particular bingo – the new company will have a winning formula to exploit the growing online gaming market, supported by a strong balance sheet, significant cash flow generation and a highly experienced management team.”
Norbert Teufelberger, the Co-Chief Executive Officer of bwin, is quoted in the press release and Gaming Intelligence story as saying, “This merger of equals makes great strategic, operational and financial sense. We will be in pole position to capitalize on the wealth of opportunities that will flow from the continued evolution and expansion of the global online gaming industry.”
Leadership of the new company will be held by Ryan and Teufelberger in a co-CEO role, with the board of directors split evenly between the two companies. Martin Weigold, who currently is the Group Finance Director with PartyGaming, will assume the same role with the new company. Joachim Baca, currently the co-Chief Operating Officer at bwin, will become COO in full under the proposed merger. Current co-CEO Martin Bodner of bwin will step into the role of a non-executive member of the board in the new conglomerate.
The merger has been one of the worst kept secrets in the online gaming industry, with rumors of the deal dating back to late 2009. In a Poker News Daily story in December, both PartyGaming and bwin refused to discuss the rumored merger that had been reported in the London newspaper The Times. These rumors faded for a time before once again rising in April 2010, fueled by speculation from the Austrian web magazine Format and reports from Reuters India.
The combined PartyGaming/bwin company will be the largest publicly traded online gaming organization in the industry, with the duo’s net worth nearly €3.4 billion (approximately $4 billion U. S.) The proposed merger will see bwin take a 51.64% share of the new company, with its stockholders receiving 12.23 shares of PartyGaming for each share of bwin that is owned.
News of the merger has sent both entities stock prices soaring. Traded on the Vienna Stock Exchange, bwin Interactive Entertainment shares surged throughout Thursday, starting at €35.81 before peaking at €45.5 after the merger announcement. At the end of trading, bwin Interactive Entertainment settled in at €42, a 17.88% increase in value. PartyGaming, traded on the London Stock Exchange, showed similar activity on Thursday, starting off Thursday’s trading at 259.9p before jumping to 333p following the announcement. By the end of trading on the London Stock Exchange, PartyGaming stock sat at 309.5p, a 20.43% increase.
