Ladbrokes-Gala Coral deal clearance may depend upon shop sales

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

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

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

The CMA has actually given until 13 June for responses to its provisional findings.

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

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

Martin Cave, who is chairing the CMA's inquiry, said: "We have actually provisionally discovered that the merger between 2 of the largest bookmakers in the nation might be anticipated to decrease competitors and option for customers in a a great deal of cities.

"Although online wagering has grown considerably in recent years, the evidence we have actually seen verifies that a big number of clients still choose to bet in stores - and lots of would continue to do so after the merger.

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

The CMA said it was intending to release its final report by the end of July.

Ladbrokes stated: "This is a substantial step and our focus now will be on concurring the shop disposals to satisfy the CMA." Ladbrokes shares had actually jumped 6.5% by the close of trade on Friday.

stated it noted that the CMA was "provisionally minded to clear the proposed merger" and that it would continue to work with the regulator on ways to achieve last clearance.

Analysis: Frank Keogh, BBC Sport racing reporter:

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

While critics say the casino-style devices have motivated problem gamblers, the yohaig code bookies firmly insist staff are trained to keep an eye out for concerns.

The bottom line is the rise of the makers has helped keep numerous of these stores open in a modern-day betting world where online gambling has mushroomed.

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

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

"We anticipate substantial cost saving will be possible due to the fact that there will be large locations of overlap and unnecessary duplication of functions throughout the combined company," said Steve Clayton, head of equity research study 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 handle November.

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11 August 2015