British bookmaker William Hill has confirmed it is in merger talks with Canadian gambling group Amaya, a deal that may be the perfect solution for the two troubled companies.

Both groups have been seeking a deal for months, with William Hill rejecting takeover bids from both 888 Holdings and Rank Group earlier this year. Amaya has struggled with the expansion of its sports betting business, and William Hill has faced competition from online competitors and increased regulation in the UK market.

On Saturday, the companies confirmed they were beginning negotiations for a £4.6 billion all-share “merger of equals”, saying that the potential merger would “be consistent with the strategic objectives of both William Hill and Amaya and would create a clear international leader across online sports betting, poker and casino.”

The multinational company would combine their online betting, which would account for 60 percent of the business, with “land-based business”. The enlarged company would have 60 per cent of its revenues from online betting, and 40 per cent in “land-based” business and would be fully diversified across all gambling sectors. The cost savings are estimated to be over £100 million.

Investors reacted positively to the news, with Amaya shares up nearly 10 percent on at 23.41 and William Hill up 2.07 percent (1307GMT).

10/10/2016