Scientific Games Corp (SGMS), a maker of slot machines for casinos, will buy larger rival Bally Technologies Inc (BYI) for about $3.27 billion to expand its electronic and table games and online lottery businesses.

The $83.30 per share cash offer represents a 38 percent premium to Bally's Thursday closing price of $60.17 on the New York Stock Exchange, the companies said on Friday.

Bally shares were up at $80 in premarket trading. Scientific Games shares were up 23 percent at $10.50.

The deal — valued at $5.1 billion, including debt — will also help Scientific Games expand in Australia, New Zealand, and the Pacific islands.

The company, which has a market capitalization of $720 million, said it would finance the deal with debt and cash on hand. It has obtained committed debt financing from BofA Merrill Lynch, J.P. Morgan and Deutsche Bank Securities.

Scientific Games said it expects to save $220 million in costs and cut capital expenditure by $25 million annually by the end of the second year of the completion of the deal.

BofA Merrill Lynch, Deutsche Bank Securities Inc and J.P. Morgan acted as financial advisers to Scientific Games. Cravath, Swaine & Moore LLP served as the legal adviser.