Ladbrokes Gala Coral merger receives CMA approval
Two firms set to merge in the autumn pending the disposal of 350 to 400 shops
Ladbrokes and Gala Coral will merge this autumn after the Competition and Markets Authority (CMA) today confirmed the operators must sell between 350 and 400 shops for the deal to go ahead.
In a statement this morning, the CMA said the two operators must first offload the bulk of the shops after it had identified 642 local areas which could see a substantial lessening of competition as a result of the merger.
Ladbrokes and Coral must now propose a divestment package to remedy the situation and find one or more “suitably qualified” shop buyers, which must receive the CMA’s approval.
Today’s announcement is line with the CMA’s provisional findings released on 20 May, after which it invited Ladbrokes, Gala Coral and third-parties to comment on the report and provide solutions to any competition problems.
Today’s decision comes earlier than expected after the CMA had extended its final reporting deadline by eight weeks from 24 June to 19 August in order to fully consider, among other things, third-party responses and shop disposal locations.
Both Ladbrokes and Gala Coral welcomed the CMA’s decision and said they could now press ahead with the sale of the shops in order to advance he merger.
“This is a significant step forward and we will now begin to talk in earnest to potential buyers for these shops. We remain on track to complete the merger in the autumn,” a Ladrbokes statement read.
“Discussions with potential buyers can now accelerate, and we remain on track to complete the merger in the autumn,” echoed Gala Coral.
Ladbrokes has 2,150 betting shops in Great Britain, as well as 77 in Northern Ireland, while Coral also owns 1,850 shops in Great Britain.
The likes of Paddy Power, BoyleSports and Betfred have all been mooted as potential suitors to acquire some, or all, of the 350-400 shops to be offloaded by Ladbrokes and Coral.
Today’s announcement is line with the CMA’s provisional findings released on 20 May, after which it invited Ladbrokes, Gala Coral and third-parties to comment on the report and provide solutions to any competition problems.
Gala Coral CEO, Carl Leaver, wrote to staff shortly after the provisional findings release and said he expected the merger to be completed in September or October.
Explaining the CMA’s findings, Martin Cave, Inquiry chair, said: “We’ve found that the merger between two of the largest bookmakers in the country would reduce competition and choice for customers in a large number of local areas.
“Although online betting has grown substantially in recent years, the evidence we’ve seen confirms that a significant proportion of customers still choose to bet in shops – and many will continue to do so after the merger.
“We therefore believe that a sale of shops of this scale is needed to protect these customers.” he added.
Gala Coral and Ladbrokes management are set to go head-to-head for senior roles next month as the two firm’s kick-off an interview process for duplicated roles.
Ladbrokes’ share price was up 0.60% to 135p on the London Stock Exchange at the time of writing.