It was announced on July 29, 2010 that PartyGaming and bwin will merge into the largest publicly traded online gambling company in the world early in 2011. This is a major shift in the world of online gambling and especially online poker as this merger will help solidify PartyGaming's PartyPoker as the 3rd largest poker room in the world due to bwin's major position as part of the large Ongame poker network. In the coming future this merger with help challenge Full Tilt Poker as the number two poker room on the Internet.
Specifics of bwin and PartyGaming Deal
Together bwin and PartyGaming earned nearly $900 million USD in 2009 and their combined worth will likely be in the $4 billion USD range as both are currently publicly traded. There still needs to be a vote from stockholders to approve the proposed merger and there must be a 75% approval majority for the merger to continue.
From a management standpoint it appears that the merger will be somewhat evenly split. The co-COO from bwin, Joachim Baca, will become COO of the merged company; CEO of PartyGaming Jim Ryan and co-CEO of bwin will become joint Chief Executive Officers of the new company; and, Martin Bodner, the other co-CEO of bwin will become a non-execuative member of the joint board of directors. Given that this merger has been talked about for the better part of a year it is no surprise that the new conglomerate will be a well honed entity well positioned to take on the rest of the online gambling world, not just online poker.
What bwin and PartyGaming Bring to the Table
As it stand before the merger both companies are heavyweights in the world of online gambling. Each company currently hosts a roster of online gambling offers from the staples of online gaming, poker and casinos, to two of the largest sports books online and especially online bingo. Online bingo is one of the combined operations that will most definitely continue to increase with the merger as it is becoming a major addition to online gambling that is overlooked by many companies.
The two companies have extremely solid cash flow even during the economic downturn and both have been mainstays in the world on online gambling for over a decade. This translates into a well seasoned team of executives who know the market and know what their merger means. Not only has the announcement of the merger pushed each of their stock prices higher (bwin saw 17% increase on the Vienna Stock Exchange and PartyGaming jumped 20% on the London Stock Exchange) but it will most likely continue to rise once the merger has become finalized.
This merger is more than likely the start of a trend in a market that is highly diluted. Online poker has developed a few key poker rooms and networks, but on the whole there are hundreds of separate poker rooms all vying for the same players. The merger between PartyGaming and bwin has helped consolidate a great number of poker players into one place. As the U.S. online gambling market comes closer to regulation it would not be surprising if the future of the online poker industry will be dotted with major mergers between poker rooms and poker networks.
David Tubbs - David is a graduate of the University of Waterloo with an Honours B.A. in History with a focus on medieval Europe. While his formal ...
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