The worst kept secret in gaming over the past few days is now official. On Thursday morning, 888 Holdings confirmed it has agreed to purchase William Hill’s non-US assets from US casino giant Caesars Entertainment Inc, beating the private equity firm Apollo Global Management to the punch.
The price, previously reported as “at least” £2 billion, is £2.2 billion ($3 billion). 888 said it expects the transaction to be completed during the first half of next year.
The deal will allow Caesars to recoup more than two thirds of the US$3.7 billion it paid for William Hill in April. Caesars said at the time it was only interested in the group’s US assets as it made a play for the fast-growing US sports betting market.
888 will gain control of William Hill’s branded digital sports betting and gaming operations in the UK and across Europe, including the online casino brand Mr Green.
We believe the acquisition will create significant value for shareholders, creating a combined business with leading technology, products and brands across sports betting, gaming and poker, supported by top quality management talent from both businesses,” 888 chair Lord Jon Mendelsohn, said in a statement.
He added the deal will create “a global leader in the online sports betting and gaming industry.”
The Gibraltar-based company will also acquire – at least temporarily – William Hill’s 1,400-plus land-based betting shops in the UK.
It’s unclear whether digital-only 888 plans to hang on to the retail outlets or to offload them to another company with an existing presence in the land-based betting sector. UK bookmaker BetFred is hungry for expansion and has expressed an interest in taking them on.
The UK retail betting sector has become less lucrative in recent years because of a diminishing consumer interest in horse racing, the growth of online sports betting, and tighter government controls on products like fixed-odds betting terminals.
But in a March earnings call, 888 CEO Itai Pazner said the retail business “could be an interesting asset,” adding there were “benefits” to owning betting shops.
Founded in 1934 as a postal and telephone-based betting service, William Hill opened its first shops in the mid-1960s when they first became legal in the UK.
It was for many years the UK’s leading land-based betting company until it was usurped by the merger of Ladbrokes and Coral, which is now part of the Entain group.
“The William Hill and 888 strategies are highly complementary with an absolute focus on the product and customer experience. Scale is increasingly important in our sector and the combination of the businesses will provide a powerful alignment of brands and technology,” CEO of William Hill International Ulrik Bengtsson said in a statement.
The deal is still subject to shareholder approval, and it will also need a green light from the UK’s Financial Conduct Authority.
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