PartyGaming and bwin announce merger

After months of speculation, bwin and PartyGaming have announced that they will merge to form the world's largest publicly traded online gambling company.

Bloomberg News valued the deal at $1.76 billion.

The combined entity will be owned by PartyGaming and bwin shareholders, with PartyGaming shares equaling 48.4 percent of the company and bwin shares equaling 51.6 percent of the company.

The two companies have always been seen as a natural fit, with bwin's strong sportsbook fitting in nicely with PartyGaming's strong poker and casino offerings.

The newly merged company will be incorporated in Gibraltar and run by bwin co-CEO Norbert Teufelberger and PartyGaming CEO Jim Ryan.

The merger will have to be approved by 75 percent of both bwin and PartyGaming shareholders at shareholder meetings in the first quarter of 2011. Should that approval occur, bwin will transfer all assets and liabilities to PartyGaming and the new company will be incorporated in Gibraltar. Upon the completion of the merger, bwin will be delisted from the Vienna Stock Exchange and shares in the combined entity will be traded on London's FTSE.

"The business combination makes great strategic, operational and financial sense," said Teufelberger in a statement announcing the merger. "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."

"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 gaming market, supported by a strong balance sheet, significant cash flow generation and a highly experienced management team," said PartyGaming Chief Executive Jim Ryan.