Shares in online gambling giant Betfair (LON:BET) soared nearly 18 percent this morning, after a merger was announced between Betfair and Paddy Power.

The £5 billion deal is the latest in a series of gambling mergers, and will create one of the world’s biggest online betting and gaming companies.

The agreement is not yet final, but in a statement the companies said that the deal had “compelling strategic logic”, and would and enhance their their market position. The combined business would have annual revenues of some £1.1bn.

Paddy Power shareholders will own 52% of the combined business, with Betfair investors owning the remaining 48%.

Betfair Chief Executive Breon Corcoran told Reuters:

“We fundamentally believe this industry is all about scale.

“By putting together two distinct but phenomenally strong brands, we’ll have a market leading position in the UK, Ireland, Australia and in the United States.”