PartyGaming and Austria's bwin in tie-up

LONDON (Reuters) - Internet betting firm PartyGaming PRTY.L has agreed to a reverse takeover of Austrian rival bwin BWIN.VI in a $3.3 billion (2.1 billion pounds) deal that will create the world's largest online gaming business.

The two companies styled the all-share deal a merger of equals although bwin shareholders will end up owning 51.6 percent of the company while investors in PartyGaming will hold the remaining 48.4 percent.

The new group will be listed on the London Stock Exchange and jointly run by current chief executives of the two companies, Jim Ryan and Norbert Teufelberger.

Based on Wednesday's closing share prices, PartyGaming had a market value of 1.050 billion pounds while bwin was worth 1.281 billion euros (1 billion pounds).

The companies said they already had support for the deal from shareholders owning 28.5 percent of PartyGaming and 14.4 percent of bwin.

"This is a transformational opportunity for both our companies to create the world's largest listed online gaming business," Ryan said in a statement on Thursday.

"With market-leading positions in poker, sports betting, casino and games -- in particular bingo -- the enlarged group will have a winning formula to exploit the growing online gaming market."

A tie-up between the two companies has long been expected as they seek to capitalise on expected deregulation around the world, particularly in the potentially lucrative U.S. market.

(Reporting by Matthew Scuffham and Paul Hoskins)