(Adds detail.) By Simon Zekaria Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Shares in PartyGaming PLC (PRTY.LN) and Austrian peer Bwin Interactive Entertainment AG (BWIN.VI) were sharply higher Thursday after the U.K.-listed gambling group and one of Europe's largest sports book operators said they plan to merge. At 1209 GMT, shares in PartyGaming, the world's biggest listed online gaming group by market capitalization, rose 51 pence, or 19.9%, to 308 pence, valuing the company at GBP1.26 billion. Bwin shares were up EUR8.88, or 24.9%, at EUR44.51, valuing the company at EUR1.58 billion. The long-expected deal, which will result in a merged entity owned 48.36% and 51.64% by PartyGaming and Bwin shareholders respectively, will create the world's largest listed online gambling business. The merged entity, which will be listed on the London Stock Exchange, will have net gaming revenue of EUR682 million and earnings before interest, taxes and amortization of EUR196 million, before synergies, PartyGaming said. It will also have annualized pretax synergies of about EUR55 million from the first year. Jim Ryan, Chief Executive of PartyGaming and Norbert Teufelberger, Co-CEO of Bwin, will jointly run the merged group as co-chief executives. Teufelberger said his Co-CEO at Bwin, Manfred Bodner, is to leave his position and become a non-executive director. Irrevocable undertakings in support of the merger have been received from shareholders currently holding 28.5% and 14.4% of PartyGaming and Bwin's existing issued share capital respectively, the group said. Ryan said the merger, which is a "transformational opportunity" for both groups, will likely result in a new publicly traded name. Bwin will be ultimately de-listed. The tie-up is expected to be "significantly earnings enhancing" for both companies pre-amortization. Ryan said the company can "exploit" its market-leading positions in poker, sports betting, casino and games. A Daniel Stewart analyst said the merger, which has clear commercial and logistical sense, has been well-forecast. "(Consolidation) has been coming for a long time now." The analyst also said gradual deregulation of the industry and, particularly, the potential opening of the U.S. online gaming market are a catalyst to companies in the sector with a diversified gaming offering. The financial services committee of the U.S. House of Representatives Tuesday voted through a bill to overturn the Unlawful Internet Gambling Enforcement Act. Analysts say new legislation, while not expected in the short-term, would open up the market for online operators. Bwin Monday said it has initiated talks with potential partners to help it re-enter the U.S. market, after it was forced to leave in 2006 as a result of new and tougher U.S. gaming and gambling laws. PartyGaming was also shut out of the country at this time. Earlier this month, PartyGaming--which derives most of its revenue from online poker and casino games and has a smaller sports book and bingo business--said it expects a 28% rise in second-quarter revenue year on year, boosted by acquisitions. It retained its previous guidance for a margin on earnings before interest, tax, depreciation and amortization of 28% for the full year. In May, Bwin said its first-quarter 2010 profit after tax fell 7.3%, but reiterated it expects substantial growth in both revenue and earnings in 2010. -By Simon Zekaria, Dow Jones Newswires; +44 207 842-9410; simon.zekaria@dowjones.com and Flemming E. Hansen, Dow Jones Newswires; +43 1 513 69 22 10; flemming.hansen@dowjones.com (END) Dow Jones Newswires July 29, 2010 08:21 ET (12:21 GMT)