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Gambling technology company Playtech PLC announced Wednesday that it is in discussions to sell its Italian sports betting unit, Snaitech, to Flutter Entertainment PLC, the owner of Paddy Power, in a deal estimated at £2 billion ($2.57 billion). The potential sale underscores Playtech's strategy to streamline its operations and Flutter's continued expansion in the European gambling market.

Playtech to sell Italian unit Snaitech to Flutter : Sale Details and Strategic Implications

"Playtech notes the recent media speculation that it is in discussions with Flutter Entertainment PLC regarding the potential sale of the Snaitech business for a value that could be about £2 billion," Playtech said in a statement to the London Stock Exchange. The U.K.-based gambling software company confirmed it has granted Flutter an exclusivity period to complete due diligence and finalize transaction documentation.

Flutter, an Ireland-based online sports betting and i-gaming giant, operates globally recognized brands such as Sky Betting & Gaming, Sportsbet, PokerStars, and Paddy Power. The acquisition of Snaitech, one of Italy's largest gambling companies, would further solidify Flutter's dominance in the Italian market, where it already owns Sisal, another major online gambling firm.

Market Reaction and Company Background

Following the announcement, Playtech's shares surged by 13.75% on the London Stock Exchange, closing at 612 pence each. Flutter's shares also saw a significant rise, trading at 16,200 pence, up over 10% from the previous day's close. The potential sale is viewed as a strategic move for both companies, enhancing Flutter’s market presence in Europe while allowing Playtech to focus on its core operations.

Flutter, originally listed on the London Stock Exchange in 2000, has recently shifted its focus towards the U.S. market. The company moved its primary listing to the New York Stock Exchange in May 2023, following concerns about the attractiveness of London’s stock market. This shift reflects Flutter's broader strategy to expand its influence in the growing U.S. sports betting market.

Playtech to sell Italian unit Snaitech to Flutter : Historical Context and Future Prospects

The potential sale comes after Playtech was the target of several unsuccessful acquisition attempts in 2022. Australian casino games maker Aristocrat's £2.7 billion bid for Playtech fell through due to insufficient shareholder support, followed by terminated discussions with Hong Kong's TTB Partners Ltd. due to unfavorable market conditions.