Ladbrokes-Gala Coral deal clearance might depend on shop sales

Bookmakers Ladbrokes and Gala Coral might have to shed numerous stores if their proposed merger is to go on, the competition guard dog has said.

The Competition and Markets Authority stated a merger of the UK's 2nd and 3rd largest bookmakers might restrict competition on the High Street.

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

The CMA has actually offered till 13 June for reactions to its provisional findings.

Ladbrokes operates 2,154 betting stores in Great Britain and 77 in Northern Ireland, while Gala Coral operates about 1,850 betting stores in Great Britain.

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

Martin Cave, who is chairing the CMA's questions, stated: "We've provisionally found that the merger between 2 of the biggest bookmakers in the nation may be anticipated to decrease competition and option for consumers in a large number of regional areas.

"Although online wagering has grown considerably recently, the evidence we've seen validates that a a great deal of clients still choose to bet in stores - and numerous would continue to do so after the merger.

"For these customers, competition comes from the yohaig code choice of stores in their regional area and it's they who might lose out from any reduction of competitors and choice."

The CMA stated it was aiming to release its last report by the end of July.

Ladbrokes said: "this promotion code is a significant step and our focus now will be on agreeing the shop disposals to please the CMA." Ladbrokes shares had jumped 6.5% by the close of trade on Friday.

Gala Coral stated it noted that the CMA was "provisionally minded to clear the proposed merger" and that it would continue to deal with the regulator on methods to attain final clearance.

Analysis: Frank Keogh, BBC Sport racing press reporter:

The face of Britain's wagering shops has actually transformed in the last 20 years - from smoky boltholes with horse racing controling procedures to glossy multi-screen sport outlets where fixed-odds betting terminals are a huge earner.

While critics state the casino-style devices have actually encouraged issue gamblers, the bookmakers firmly insist personnel are trained to watch out for concerns.

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

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

Analysts say the merged company will still have a dominant position even if numerous stores have to be offered.

"We anticipate considerable cost conserving will be possible because there will be vast locations of overlap and unnecessary duplication of functions across the combined service," stated Steve Clayton, head of equity research study at Hargreaves Lansdown.

Ladbrokes concurred the regards to a ₤ 2.3 bn all-share merger with Coral in July, and the company's investors backed the handle November.

Ladbrokes earnings struck by writedowns

11 August 2015