Paddy Power Betfair said today it reached a definitive agreement to combine its US business, Betfair US, with US fantasy sports operator FanDuel.

Under the terms of the deal, the bookmaking business will contribute with its US assets plus USD158 million in cash. After the transaction the group will have a 61% stake in FanDuel.

“A mechanism has also been agreed to take the group’s ownership of the business to 80% after three years and 100% after five years, consisting of call and put options at the prevailing market valuations,” the company said.

The bookmaker said the transaction strengthens its targeting of the US sports betting market.

The transaction is not expected to have a material impact on the Group’s 2018 underlying earnings before interest, taxes, depreciation and amortisation.