Ladbrokes-Gala Coral deal clearance might depend upon store sales

Bookmakers Ladbrokes and Gala Coral might need to shed hundreds of stores if their proposed merger is to proceed, the competitors guard dog has actually said.

The Competition and Markets Authority said a merger of the UK's 2nd and third biggest bookmakers might limit competitors on the High Street.

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

The CMA has provided till 13 June for responses to its provisionary findings.

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

The combined group would make it bigger than current market leader William Hill.

Martin Cave, who is chairing the CMA's query, said: "We have actually provisionally found that the merger in between 2 of the biggest bookmakers in the country may be expected to minimize competitors and option for consumers in a big number of areas.

"Although online betting has grown considerably in recent years, the evidence we have actually seen validates that a big number of customers still pick to bet in shops - and many would continue to do so after the merger.

"For these clients, competitors comes from the option of shops in their area and it's they who could lose out from any decrease of competitors and choice."

the yohaig code CMA stated it was intending to publish its last report by the end of July.

Ladbrokes stated: "this promotion code is a substantial step 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 noted that the CMA was "provisionally minded to clear the yohaig code proposed merger" which it would continue to work with the regulator on ways to attain last clearance.

Analysis: Frank Keogh, BBC Sport racing press reporter:

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

While critics state the casino-style makers have encouraged issue gamblers, the bookies insist personnel are trained to watch out for issues.

the yohaig code bottom line is the rise of the devices has actually helped keep much of these stores open in a modern-day wagering world where online betting has actually mushroomed.

And while some stores look predestined to be casualties, this promotion code proposed ₤ 2.3 bn merger shows there is lots of money still to be made in the British wagering industry.

Analysts say the merged company will still have a dominant position even if numerous shops need to be sold.

"We anticipate considerable cost conserving will be possible since there will be huge areas of overlap and unnecessary duplication of functions across 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 company's investors backed the deal in November.

Ladbrokes profits struck by writedowns

11 August 2015