Gambling operators Ladbrokes plc and Gala Coral Group Limited will have to sell between 350-400 betting shops around the UK in order to be allowed to complete their proposed £2.3-billion merger, the UK Competition and Markets Authority said in a statement from earlier today.
The two gambling companies revealed merger plans last summer. Following the announcement, UK’s top competition and consumer authority appointed a special inquiry group to investigate into the proposed consolidation. The £2.3-billion deal was referred for a Phase 2 investigation early this year.
After a comprehensive study of the effects the merger may have in local areas and nationwide, the inquiry group concluded that there are 642 potential local areas where competition may lessen substantially. As a result, customers may face a situation of worsened local offering.
In order for the CMA to prevent such negative effects, it ruled that Ladbrokes and Coral must sell between 350 and 400 betting shops to one or more interested buyers. Only after these are sold out, the two gambling operators will be allowed to proceed with the merger.
Commenting on the latest announcement, Martin Cave, Chair of the inquiry panel, said that although online sports betting offering has enjoyed rapidly growing popularity, there is still a wide number of gambling customers who prefer placing their bets in brick-and-mortar venues. This is why, the authority had deemed it necessary to protect that portion of bettors and to make sure that they would not lose out from any potential competition reduction resulting from the proposed merger.
As pointed out by CMA, Ladbrokes and Coral are UK’s second and third largest operators of betting shops. The first operator manages about 2,150 such venues across Great Britain and 77 of them in Northern Ireland. As for Coral, it operates about 1,850 betting shops in Great Britain.
The two operators welcomed CMA’s ruling and said that they will now focus their attention on finding the most suitable buyers for their betting shops. If everything goes as planned, the merger is expected to be completed this fall.
Ladbrokes and Coral are active participants in the ongoing changes of UK’s gambling landscape. The pair is one of three to have announced merger plans last summer. Paddy Power/Betfair and GVC Holdings/bwin.party completed the consolidation of their businesses early in 2016.
On Sunday, gambling operators Rank Group and 888 Holdings announced that they are mulling a potential merger to bid for fellow operator William Hill. If such a deal takes place, it will result in the creation of yet another gambling powerhouse with omni-channel operations in multiple regulated jurisdictions. William Hill, however, seems to be lukewarm on the announcement, despite the indisputably big potential of the three-way deal.
