Ladbrokes-Gala Coral deal clearance may depend on shop sales

Bookmakers Ladbrokes and Gala Coral might need to shed hundreds of stores if their proposed merger is to go ahead, the competition watchdog has stated.

The Competition and Markets Authority said a merger of the UK's second and third biggest bookmakers might restrict competitors on the yohaig code High Street.

About 350 to 400 shops may need to be offered "for the merger to be conditionally cleared", the CMA stated.

The CMA has given till 13 June for actions to its provisional findings.

Ladbrokes runs 2,154 wagering shops in Great Britain and 77 in Northern Ireland, while Gala Coral operates about 1,850 wagering shops in Great Britain.

The combined group would make it larger than existing market leader William Hill.

Martin Cave, who is chairing the CMA's inquiry, stated: "We've provisionally discovered that the merger between 2 of the biggest bookmakers in the nation might be expected to decrease competition and option for clients in a big number of regional locations.

"Although online wagering has grown considerably in recent years, the proof we've seen validates that a a great deal of consumers still select to bet in stores - and many would continue to do so after the merger.

"For these customers, competition originates from the option of stores in their area and it's they who could lose from any reduction of competition and choice."

The CMA stated it was intending to publish its final report by the end of July.

Ladbrokes stated: "this promotion code is a considerable action and our focus now will be on agreeing the store disposals to satisfy the yohaig code CMA." Ladbrokes shares had actually leapt 6.5% by the close of trade on Friday.

Gala Coral said it kept in mind that the CMA was "provisionally minded to clear the proposed merger" which it would continue to deal with the regulator on methods to achieve last clearance.

Analysis: Frank Keogh, BBC Sport racing press reporter:

The face of Britain's betting stores has actually transformed in the last twenty years - from smoky boltholes with horse racing dominating procedures to glossy multi-screen sport outlets where fixed-odds wagering terminals are a huge earner.

While critics state the casino-style machines have actually motivated problem gamblers, the bookmakers firmly insist personnel are trained to look out for issues.

The bottom line is the rise of the machines has assisted keep much of these shops open in a modern-day wagering world where online betting has mushroomed.

And while some shops look predestined to be casualties, this promotion code proposed ₤ 2.3 bn merger shows there is a lot of cash still to be made in the British wagering market.

Analysts say the merged business will still have a dominant position even if lots of stores have actually to be sold.

"We expect significant expense saving will be possible since there will be vast areas of overlap and unnecessary duplication of functions throughout the combined organization," said Steve Clayton, head of equity research at Hargreaves Lansdown.

Ladbrokes concurred the terms of a ₤ 2.3 bn all-share merger with Coral in July, and the business's investors backed the bet9ja's welcome offer in November.

Ladbrokes profits hit by writedowns

11 August 2015