The recent merger of Paddy Power and Betfair is expected to lead to the loss of 650 jobs across the United Kingdom and Ireland. Betting shop jobs are not expected to be affected. Administrative offices however, have many duplications. The legal departments, human resources, finance, technology and trading divisions will all be reduced in the merger. The combined workforce for both companies is 7000+. The UK operations will lose about 350 jobs, while Ireland will lose about 300. The combined company will have two main offices, one in Clonskeagh, Dublin, and one in Hammersmith, West London.
The new company, Paddy Power Betfair is the result of a £5bn merger that was completed in February. The combined company will have 336 shops in the UK and 252 in Ireland, as well as an online betting operation. For the year ending December 2015, the company posted pretax profits of £139.1 million. There has been growing consolidation within the industry worldwide. The combined companies were listed to the FTSE 100 recently.
In the past, Paddy has been known for promoting funny stunts like offering 100,000 to 1 on Pope John Paul II signing at Glasgow Rangers. The combined businesses now being worth more than £8bn, make things a little more serious. Current chief executive of Betfair, Breon Corcoran will run the merged company. With the guidance of a combined management team, the merger represents an opportunity for both companies to enhance their position in the industry, and to deliver customer benefits and shareholder value.
Paddy Power and Betfair will remain separate brands in the UK, Italy and Ireland. The main headquarters of the new company are set to be in Dublin. Shareholders in both companies seemed happy to hear the news of the merger as shares of the stocks moved higher. News of the merger sent rival shares down, over concerns of the new giant company Paddy Power and Betfair will create.
Paddy Power will lose their Chief Marketing Officer, Gav Thompson, because of their merger. It had been expected that Thompson would remain with the company after the merger. Thompson just recently joined the firm in April 2015, after a stint with Thunderhead.com.
Paddy Power started out in 1988 with the merger of three Irish bookmakers. The merger created 40 betting shops, in Ireland. Stewart Kenny was the CEO of Paddy Power until 2002. The company adopted an aggressive expansion strategy, which called for opening prominent shops in most Irish towns. Their share of the Irish off- course betting market increased by 25% from 1988 to 2001. Power Leisure, the parent company of Paddy power listed on the London Stock exchange in December 2000.
By 2006, Paddy power operated 150 shops in Ireland and 45 in the UK. They acquired bookmaker McGranagan Racing bringing the total shops to 191 in Ireland. By 2010 they had a total of 209 shops in Ireland, eight shops in Northern Ireland and 139 in Great Britain. The two companies’ combined will cause a major explosion of the brand name.