Carl Leaver, Chief Executive Officer of Gala Coral, commented on the soon-to-be-materialized merger between Gala Coral and Ladbrokes and defined it as the most sensible solution in the long term.
What made the two rival companies settle for a merge was their aim to blunt the intensified competition from casino companies considered market leaders. The merger will make Ladbrokes Coral Plc. the largest betting chain in the United Kingdom. It is also important to mention that the Bingo business of Gala Coral will not be a part of the deal.
Gala Coral has published details about its financial performance in H1 of 2016 and the released numbers show satisfactory results despite the pre-tax loss of almost £50 million. Mr. Leaver also said that Ladbrokes’ financial performance has also been satisfactory lately, but once the merger was completed, company’s growth is expected to be hampered.
Coral’s CEO went on to say that the integration of two companies always hides a risk, but it was management’s job to handle the risk. He also confirmed that he will be staying on for a year after the £2.3-billion deal is completed.
Leaver said that Jim Mullen will be in charge of the day-to-day business and added that both Ladbrokes and Coral got a momentum, which therefore means that if these two momentums are brought together, the merger will be extremely beneficial.
People with knowledge of the matter predict that the merger will make one of the sportsbooks phase out and all efforts will be focused on developing the second one.
According to gaming experts, the combined firm might maintain both brands with the aim of dealing with competition concerns. Yet, they presume Coral’s digital product is to be re-branded to Ladbrokes because of its “tier one” status.
Leaver confirmed that Coral executives considered the multi-brand strategy the right one and drew the merger between Paddy Power and Betfair as an example. He said that Coral officials were convinced that the strategy they incorporate would boost the real value of the merger.
Coral’s CEO clarified that avid sports betting fans have several mobile betting apps on their devices and after the merger, the multi-brand strategy will allow Ladbrokes Coral Plc. to maintain two apps instead of one.
The merger is currently being investigated by Competition and Markets Authority and the final decision is to be announced no later than June 24th.
Meanwhile, the CMA required both operators to close between 350 and 400 high street betting shops before being allowed to move the merger deal forward.
More at EGR Magazine.
