One of the world's biggest gambling businesses is set to be created after Paddy Power and Betfair agreed a possible merger.
The new online gaming and betting chain would have revenues of £1.1 billion (1.5 billion euro) and it would be one of the most valuable bookmaking brands on the stock markets.
Both companies cautioned there was no guarantee the deal would go through but they expect to make a further announcement in coming weeks.
The boards have agreed in principle to rebrand the merged businesses as Paddy Power Betfair, with Paddy Power shareholders owning 52% and Betfair 48%.
In a statement issued to the stock exchange they said: " The possible merger would create one of the world's largest public online betting and gaming companies by revenue with enlarged scale, capability and distinctive and complementary brands.
"The combination has compelling strategic logic and represents an attractive opportunity for both companies to enhance their position in online betting and gaming and to deliver synergies, customer benefits and shareholder value."
If the merger is successful Paddy Power shareholders would receive a special dividend of £58 million (80 million euro).
Other changes would see Breon Corcoran, Betfair chief executive, become the new company head.
Both companies said the deal is being finalised with a view to maximising benefits to shareholders and other stakeholders and it is expected that the new brand will maintain a significant presence in Ireland and in the UK.
It also pointed to attractive international growth opportunities across continental Europe, the US and Australia.
The merger of such two big players in the bookies market, particularly online gambling, follows plans by Ladbrokes to merge with Gala Coral in a deal worth £2.3 billion (3.1 billion euro)
That new company would overtake William Hill as the biggest bookmaker in Britain but the potential second merger involving Paddy Power and Betfair would see three global giants of gaming, betting and online gambling.
Paddy Power was founded in 1988 by the merger of three existing Irish bookmakers and it has become well known for its irreverent marketing style.
Its rapid growth in recent years has seen it build more than 350 betting shops in Ireland and the UK, and it now ranks the third largest online bookmaker and sixth largest online gaming business in Britain and Ireland.
Paddy Power's results for the first six months of the year showed operating profits up to £58 million (80 million euro).
Betfair comes from a newer side of the bookmaking fence.
In 1999 professional gambler Andrew Black and city professional Edward Wray joined forces to form The Sporting Exchange, which went on to launch the Betfair Betting Exchange the following year offering the market something of a revolution.
Its first market was the Epsom Oaks in 2000 but the new approach to gambling quickly took off by giving punters to chance to take bets and subsequently bet in play.
Betfair floated on the London stock exchange in 2010.