Flutter – previously called Paddy Power Betfair – will own 54.6 per cent of the merged firm.
It will have its headquarters in Dublin and be listed on the London Stock Exchange as well as on Euronext Dublin.
The tie-up – completed through a takeover of The Stars Group (TSG) by Flutter – will allow the two firms to make savings of €150 million a year, while there will also be potential revenue cross-sell in international markets and lower finance costs.
Flutter chairman Gary McGann will become chairman of the combined group, while Flutter chief executive Peter Jackson will head up the firm in the same role.
Rafi Ashkenazi, chief executive of TSG, will become chief operating officer of the combined group.
Following the transaction, Flutter said it will have customers in more than 100 international markets.
Mr Jackson said the deal will “turbocharge” Flutter’s growth strategy.
Mr McGann added: “This is an exciting and transformational combination that will bring together two strong, complementary businesses to create a global leader in the fast-growing online sports betting and gaming industry.”
Mr Ashkenazi said the deal will “position us strongly for the future in this rapidly evolving industry”.
It comes amid a period of unprecedented change in the global betting industry, which has seen a raft of deals in recent years amid the rise in online gaming and regulation crackdowns.
James Wheatcroft, an analyst at Jefferies, said it was a “compelling” deal.
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