New Merger Between Online Gaming Giants PartyGaming and bwin

PartyGaming plc and bwin Interactive Entertainment AG have announced that their long-awaited merger has been confirmed, with bwin taking the majority share (51.64%) of the new business. It is believed that the merger will take place in 2011, but both companies are still waiting on the required 75% approval from shareholders.

Party gaming CEO, Jim Ryan, was keen to highlight the benefits of the deal: “This is a transformational opportunity for both our companies to create the world's largest listed online gaming business. With market-leading positions in poker, sports betting, casino and games (in particular bingo), the enlarged group will have a winning formula to exploit the growing online gaming market, supported by a strong balance sheet, significant cashflow generation and a highly experienced management team."

Co-Chief Executive Officer of bwin, Norbert Teufelberger, also said that “this merger of equals makes great strategic, operational and financial sense. We will be in pole position to capitalise on the wealth of opportunities that will flow from the continued evolution and expansion of the global online gaming industry."

The merger could achieve gross earnings of approximately €42 million per annum, by reducing duplicate costs and having a larger say in the market share. It is also believed that €30 million will be made from cross-selling the games of PartyGaming and bwin. However, both companies realise that these benefits won’t be achieved any time soon and have given themselves a two-year timeframe to see results. PartyGaming will become a European Company of Societas Europae (SE), which will mean it will still be located Gibraltar, along with the central headquarters for the new business. Jim Ryan and Norbert Teufelberger will be Co-Chief Executives and an independent chairman will also be appointed to the group.

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