Published on: September 16, 2024, 04:21h.
Last updated on: September 16, 2024, 04:21h.
Flutter Entertainment (NYSE: FLUT) is reportedly in discussions to acquire Playtech’s (LSE: PTEC) Snaitech unit for approximately $2.62 billion in a deal that could be finalized this week.
Following reports of the potential deal, Playtech’s shares saw a significant increase in London trading, with Flutter offering a price that would equate to the entirety of Playtech’s market capitalization. Earlier speculations of Flutter’s interest in Snaitech were confirmed by Playtech, resulting in ongoing discussions between the two companies.
Snaitech is a major gaming company in Italy, and divesting it would allow Playtech to focus on its business-to-business technology offerings. Playtech also recently resolved a payment dispute with Mexican gaming firm Caliente, which contributed to its stock surge. There is potential for bids on Playtech’s tech business if Snaitech is sold.
The sale of Snaitech, will leave Playtech as a business-to-business provider of software, and — according to analysts — is likely to result in a formal takeover bid in the medium term,” reported Mark Kleinman for Sky News.
Last month, Flutter was granted exclusivity by Playtech to conduct due diligence on Snaitech, indicating that other bids are not currently being accepted.
Snaitech Acquisition Fits Flutter’s Strategy
If the deal goes through, acquiring Snaitech would align with Flutter’s strategy of expanding through acquisitions, particularly in Europe where it is already a prominent gaming operator, especially in Italy.
Two years ago, Flutter acquired Italian lottery giant Sisal for $2.2 billion, further solidifying its position in Italy where it already operates PokerStars and Betfair, leading brands in the country.
Italy is an appealing market due to its economic size and being Europe’s largest regulated gaming market outside of the UK, providing revenue diversification for Flutter and reducing dependence on the UK market.
Italy’s iGaming sector is rapidly growing, and Snaitech’s presence in the market positions Flutter well to benefit. Snaitech also operates in Austria and Germany, albeit on a smaller scale.
Recent Acquisitions by Flutter
Aside from Snaitech, Flutter is also in the process of acquiring a 56% stake in Brazil’s NSX Group, which controls the Betnacional brand, for $350 million in cash.
As part of the agreement, Flutter has the option to increase its stake in NSX in five and 10 years from the initial deal closing, expected by the second quarter of 2025.
Flutter, the parent company of FanDuel, holds the top position in the US online sportsbook market.