British gambling operators Ladbrokes and Gala Coral were provisionally minded to complete their planned merger, provided that they sell up to 400 betting shops across the United Kingdom. The country’s Competition and Market Authority announced its decision to give the green light to the £2.3-billion deal on Friday, May 20.
The CMA said in provisional findings that a consolidation between the two gambling companies, which are currently the second and the third biggest ones in the UK, may result in competition concerns arising in a number of locations across the nation.
This is why, the country’s competition authority pointed out on Friday that between 350 and 400 betting shops may have to be sold out in order for the merger to be completed on a provisional level.
At present, Ladbrokes manages 2,154 retail venues in Great Britain and 77 shops in Northern Ireland. As for its fellow gambling operator – Coral, it operates about 1,850 shops around Great Britain. When and if merged, the two companies and their combined business will become the owner of UK’s largest chain of betting shops, thus overthrowing William Hill.
Commenting on CMA’s findings, Ladbrokes said in a Friday statement that they reflected a significant step forward in the whole consolidation process. The gambling operator further noted that it would now focus its attention on working with the CMA to move the merger deal further forward. In addition, Ladbrokes has started looking for suitable buyers to purchase the said number of betting shops.
Gala Coral also commented on the Friday events by saying in a statement that it, too, will keep on working with the competition authority in order to agree the necessary remedies for the merger’s clearance.
The two gambling operators first announced plans for bringing their operations together in July 2015. The Ladbrokes/Gala Coral merger was one of three such deals announced over the course of the previous calendar year. Paddy Power and Betfair also revealed intention to merge together last year. The deal was completed in February 2016 and resulted in the establishment of a combined entity valued at £6 billion. Last but not least, GVC Holdings purchased bwin.party in a reverse takeover, with the transaction being completed in February 2016 again.
Commenting on the CMA findings regarding the merger between Ladbrokes and Coral, Credit Suisse analysts said that there were fears that the deal may be blocked due to concerns that the enlarged group and its shop estate would have quite a negative effect on competition.
