July 30 (Reuters) - Britain's IG Group ( IGGRF ) said on

Thursday it has agreed to acquire U.S. daily fantasy sports and

prediction markets operator Underdog for up to $1.3 billion, in

a deal that would strengthen its position in the fast-growing

U.S. retail trading market.

The deal includes an upfront consideration based on an

enterprise value of about $1.1 billion and an earnout of about

$200 million for Underdog shareholders, IG said.

The upfront equity value is expected to be about $963

million, to be paid with roughly 24.1 million new IG shares and

about $380 million in cash, while IG will also repay about $160

million of Underdog debt at completion of the deal.