Two of the biggest online gambling firms, Paddy Power and Betfair (LON:BET), have announced a £5 billion merger to create a new FTSE 100 industry giant.

The merged group will become the biggest in the UK with a share of 16 percent, according to industry data, passing a recently merged Ladbrokes Coral group at 14 percent. The group will be led by Betfair’s CEO Breon Corcoran as chief executive, with Paddy Power’s Andy McCue as COO.

“The sheer scale and capabilities of the group would mean that we’d be best-placed to compete internationally,” said Mr McCue.

Shareholders in Irish group Paddy Power will own 52 percent of the new company, with Betfair investors having just under 48 percent. Paddy Power shareholders will also receive an €80m (£59m) special dividend before the tie-up completes.

This is the latest in a string of deals announced in the betting industry recently, as companies attempt to band together to beat higher tax bills and tighter British regulation.

Betfair is currently trading up 0.26 percent on the news. (0920GMT).