William Hill Plc, the London-based gambling company has offered to acquire the Swedish Mr Green & Co AB for £242 million ($317 million) ahead of Brexit, with the aim of expanding its online businesses and strengthening its European gambling operations. Due to the recent changes in Britain’s regulations which became way more tightened, William Hill is looking to reduce the company’s reliance on its home market. The agreement will combine MRG’s RedBet and Mr Green brands with William Hill. The Background for the Deal MRG, the company behind Mr Green operates in 13 markets and possesses an international hub in Malta, which is part of the European Union, and this is what made it appealing to William Hill, due to Britain's preparations to leave the EU. William Hill’s Chief Executive Officer, Philip Bowcock, said that their company was ready to create an international hub since as part of Brexit, they need to operate outside of Gibraltar. Like Malta, the British Overseas Territory of Gibraltar has become an essential center for online gambling, but because many gambling companies have already expanded their internet presence, they have attracted the British authorities’ attention. In the past few months solely, there has been an increase of the Remote Gaming Duty, the tax for betting via offshore sites, from 15% to 21%. Two other taxes and tax increases have been imposed by the British authorities, but the thing that hit the operators most was the stake cut on fixed-odds betting terminals from £100 to £2, which will probably take effect from October 2019. Mr Green, on the other hand, has remote gambling licenses in Britain, Denmark, Latvia, Malta, Ireland, and Italy, and its Swedish license is due to the end of the year. It is a company with 11-years-experience in the field and has active operations in 13 countries. In addition, the Mr Green & Co company reported impressive results for this year's third quarter, with a nearly 51% revenue increase. For reasons far than obvious, William Hill offered MRG a near 49% premium to their closing price of SEK 46.5 on Tuesday. The board of Mr Green & Co recommended the deal for approval, and the shareholders, who own more than 40% of MRG, accepted the offer. What Would This Deal Mean for William Hill? Bowcock said that with this acquisition, William Hill's diversification will accelerate and immediately make the company a more international and more digital business. The company will experience strong growth momentum in several European countries, especially due to the fact that Mr Green will provide it with an international hub in Malta, who gives it market entry expertise. In addition, this deal would move William Hill from a single brand to a suite of popular brands and will help the company maximize growth opportunities. The addition of MRG’s RedBet and Mr Green brands would leave space for multi-brand strategies in those territories where it would be beneficial to do so. In the upcoming post-Brexit situation, MRG will provide William Hill an opportunity to expand beyond its Gibraltar base, and this would be of paramount importance. William Hill’s exposure to the changing UK gambling market will be reduced and the revenue obtained from international operations would increase from 14% to 21%. The Expected Outcome At the time of writing, the last trading price for the deal was a premium of SEK 46.5 (Swedish Crowns), which means over $317 million or £242 million valuation. The price is pretty powerful, and that is why MRG is considering it. But for the deal to move forward, approximately 90% of the shareholders and board members need to agree. Part of MRG’s board and part of the shareholders are up for the deal. One of the shareholders, though, is one of the three MRG’s founders, Henrik Bergquist. However, unless the company receives a better offer, at least 8% higher than the one offered by William Hill, Bergquist and the others are seriously considering it. Competing offers are not that impossible, because the moment speculations about the deal spread, Mr Green's stock has started soaring up close to SEK 69. The remaining shareholders will need to give the approval, subject to any extensions, in early December, while the due date is January 11.