Major UK bookmakers Ladbrokes and Gala Coral obtained much-needed clearance from the Competition and Markets Authority to complete a £2.3-million merger that the two companies first announced in July 2015.
The CMA delayed the deal’s closure as it wanted to conduct a comprehensive review on the effects it would have on UK’s high street gambling landscape. The Ladbrokes Coral combined entity will operate the country’s largest chain of betting shops. After it had completed its review, the CMA voiced concerns that the merger would result in a high concentration of betting shops managed by the same company in particular areas and in a limited choice of gambling options for players.
To prevent this from happening, the government department ordered in July that Ladbrokes and Coral divest of between 350 and 400 high street outlets. The CMA noted that it would approve their merger plan only after its requirement was fulfilled.
Ladbrokes and Coral have looked for suitable buyers for their shops for the past several months until they announced earlier in October that they would sell a total of 359 such facilities to rivals Betfred and Stan James for the amount of £55.5 million.
The original divestiture package included 185 Ladbrokes and 174 Coral betting shops. Betfred would buy 322 of those, and Stan James would acquire the remaining 37 outlets. Later on, it became known that one more shop would be sold to Bet21.
Excluding the properties sold, Ladbrokes and Coral will operate more than 3,700 betting shops. The combined entity will have a 45% share in the UK market by the number of retail properties managed and a 47% one by revenue, according to estimates provided by financial services firm Morgan Stanley.
After receiving approval from the CMA, Ladbrokes and Coral are now preparing a corporate prospect that will include information about the combined entity’s entry on the London Stock Exchange. It has also been announced that the merger will likely be completed in the very near future.
Ladbrokes’ current CEO, Jim Mullen, will take over the reins of the new company as its Chief Executive and Coral CEO Carl Leaver will take the Executive Deputy Chairman role for a twelve-month period. The combined entity will focus its attention on delivering value for shareholders by building on the success of its retail business and improving its online division.
