Ladbrokes-Gala Coral deal clearance may depend upon store sales
Bookmakers Ladbrokes and Gala Coral may need to shed hundreds of stores if their proposed merger is to proceed, the competition guard dog has said.
The Competition and Markets Authority said a merger of the UK's 2nd and third largest bookmakers might restrict competition on the High Street.
About 350 to 400 shops might need to be sold "for the merger to be conditionally cleared", the CMA said.
The CMA has given up until 13 June for responses to its provisionary findings.
Ladbrokes runs 2,154 wagering shops in Great Britain and 77 in Northern Ireland, while Gala Coral runs about 1,850 betting shops in Great Britain.
The combined group would make it larger than present market leader William Hill.
Martin Cave, who is chairing the CMA's query, stated: "We've provisionally found that the merger in between 2 of the largest bookmakers in the nation might be expected to minimize competitors and choice for customers in a large number of areas.
"Although online betting has grown considerably in the last few years, the evidence we've seen verifies that a large number of customers still choose to wager in shops - and lots of would continue to do so after the merger.
"For these customers, competitors originates from the option of shops in their regional location and it's they who might lose out from any reduction of competition and choice."
The CMA stated it was intending to release its final report by the end of July.
Ladbrokes stated: "this promotion code is a significant action and our focus now will be on agreeing the store disposals to please the CMA." Ladbrokes shares had jumped 6.5% by the close of trade on Friday.
Gala Coral stated 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 ways to achieve final clearance.
Analysis: Frank Keogh, BBC Sport racing press reporter:
The face of Britain's betting shops has actually transformed in the last twenty years - from smoky boltholes with horse racing dominating procedures to shiny multi-screen sport outlets where fixed-odds betting terminals are a big earner.
While critics state the casino-style devices have encouraged issue bettors, the bookies firmly insist staff are trained to watch out for concerns.
The bottom line is the rise of the machines has actually helped keep many of these shops open in a modern-day wagering world where online gaming has actually mushroomed.
And while some shops look destined to be casualties, this proposed ₤ 2.3 bn merger reveals there is lots of money still to be made in the British betting industry.
Analysts state the merged business will still have a dominant position even if lots of stores have actually to be offered.
"We expect significant cost conserving will be possible due to the fact that there will be huge locations of overlap and unnecessary duplication of functions across the combined organization," said Steve Clayton, head of equity research at Hargreaves Lansdown.
Ladbrokes agreed the regards to a ₤ 2.3 bn all-share merger with Coral in July, and the business's shareholders backed the bet9ja's welcome offer in November.
struck by writedowns
11 August 2015
