Ladbrokes and Coral Agree to Sell Betting Shops
The proposed $3.4 billion merger between British bookmakers Ladbrokes and Gala Coral looks set to finally receive the green light, after the two companies agreed to the demands from Competition and Markets Authority (CMA) to sell between 350 and 400 betting shops.
Ladbrokes currently operates 2,154 betting shops in the United Kingdom and Coral operates approximately 1,850 shops. The merger would combine these numbers, giving the new company more than 4,000 betting shops, dwarfing the 2,370 shops of rival company William Hill.
In April 2015, reports surfaced in the British press of the CMA demanding Ladbrokes and Coral dispose of up to 1,000 high street betting shops in order to maintain a healthy competition between the gambling companies.
The CMA later compiled a report highlighting the 642 local markets that the proposed merger could affect, resulting in substantially less competition; it is from these areas that the licensed betting shops must be sold.
“On 26 July 2016, the Competition and Markets Authority (CMA) announced that Ladbrokes and Coral must sell around 350 to 400 licensed betting offices (LBOs) in order to obtain clearance of their merger and preserve competition in 642 local markets where the companies’ betting products overlap.
“Ladbrokes and Coral have offered undertakings to sell the required number of LBOs to a suitable buyer to be approved by the CMA. The CMA now invites written comments from interested parties.”
Reports in the press suggest Boyle Sports could be interested in some of the betting shops, although the likes of William Hill, Stan James, Betfred and Paddy Power could also look to increase their portfolios.
The Ladbrokes and Coral merger will be the latest consolidation of the gambling industry in the UK. We have already seen the reverse takeover of bwin.party by GVC Holdings and the massive merger of Betfair and Paddy Power; plus, there is continued speculation about the future of William Hill who was recently thetarget of a joint takeover bid by 888 Holdings and Rank Group Plc.