With a greater scale and geographic diversification, both companies will have more strength and a substantial position on the markets, where they are not currently operating. Betfair is going to move into retail and Paddy Power is hoping to penetrate the US market. Besides, both companies have complementary resources – best developments in the industry. Betfair has an astounding technology and know-how in online betting and gambling. with its help, the new merged company will be able to enhance its products and take the leading position on the market among rivals (McLoughlin …show more content…
Apparently, the news about it affected the share prices further in that week – Paddy Power's stock increased from €93 to €97,36; Betfair's stock rose from £31,34 up to £32,40. Another reason for such rise is a disclosure, regarding possible management changes. The business world reacted quite positively. In addition, after the announcement of the new UK consumption and betting taxes, the merger looks as a smart strategic decision, allowing both companies gain potential cost savings.
Figure 1. Paddy Power's share price chart on the Irish Exchange Market from 25.08.2015 to 09.09.2015 (Anon 2015e).
As a new week started, the market share price of Paddy Power grows again by €98 on the 31st of August 2015. The share price rise continued to reflect the reaction on the tie-up with Betfair and also strong share price performance in the past week. The market share price of Betfair remained £32,40 by reason of bank holidays on London exchange market.
Figure 2. Betfair's share price chart on the London Exchange Market from 25.08.2015 to 09.09.2015 (Anon