Business Combinations

3 Months Ended

Mar. 31, 2024

11.	BUSINESS COMBINATIONS

On January 10, 2024, the Group completed the acquisition of 51%

of MaxBet, a leading omni-channel sports betting and iGaming operator in Serbia. The purchase comprised of a provisional cash consideration of $144 million (€132 million), which remains subject to the finalization of the completion accounts as defined in the share purchase agreement and any consequent adjustment to the provisional purchase consideration. This process is expected to be completed in the second quarter of

2024.

The

share purchase agreement also includes call and put options to acquire the remaining

49%

stake. The call and put options are exercisable in 2029, commencing on the date on which the option price is determined in accordance with th

terms set out in the shareholders agreement and ending on a date that is 30 days thereafter. The options expire if neither the Group nor the

non-controlling

interest shareholder groups exercise the options within the option exercise period. The option price is calculated using a multiple of MaxBet’s EBITDA less net debt or plus net cash, as defined in the shareholders agreement, subject to a cap calculated as $7 billion (€6 billion) less the purchase consideration. The options can be settled, at the Group’s election, in cash or freely tradeable shares of Flutter.

The provisional fair value of assets and liabilities acquired was $117 million. The provisional measurements of fair value for certain assets and liabilities may be subject to change as additional information is received. The Group expects to finalize the valuation as soon as practicable, but not later than one year from acquisition date.

The acquisition resulted in the recognition of $116 million goodwill on the acquisition date which has been allocated to the International segment and reporting unit. The main factors leading to the recognition of goodwill (none of which is deductible for tax purposes) is the opportunity for the Group to enter the market in the Balkans region where MaxBet is one of the market leaders with an established retail and online presence. There are also tangible opportunities to deliver synergies from the acquisition of MaxBet through (i) leveraging MaxBet’s retail channel to grow online deposits for existing Flutter brands and (ii) enhancing MaxBet’s online capabilities by utilizing the Group’s technology and marketing resources.

The fair value of redeemable non-controlling interest was $89 million, which was provisionally estimated by applying a discount for lack of marketability

of 20%

considering the output of the Finnerty method and discount for lack of control

of 20%

using implied discounts from observable transactions and data based on Mergerstat studies.

Acquisition-related costs during the three months ended March 31, 2024 and March 31, 2023 were not material and are included in the general and administrative expenses in the Group’s consolidated statement of comprehensive (loss) / income.

Since

the date of acquisition to March 31, 202

, MaxBet has contributed revenue of $47 million and $3 million

of profit after tax to the results of the Group. Considering the size of the acquisition is not material, no additional informati

n is provided.