Ladbrokes-Gala Coral deal clearance may depend on store sales

Bookmakers Ladbrokes and Gala Coral might need to shed numerous shops if their proposed merger is to proceed, the competitors watchdog has said.

The Competition and Markets Authority said a merger of the UK's second and third biggest bookies might restrict competition on the High Street.

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

The CMA has actually given 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 wagering 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 largest bookmakers in the country may be expected to lower competitors and option for clients in a big number of regional areas.

"Although online wagering has actually grown in the last few years, the yohaig code proof we have actually seen verifies that a large number of clients still choose to wager in stores - and many would continue to do so after the merger.

"For these consumers, competitors originates from the choice of stores in their area and it's they who could lose out from any decrease of competitors and choice."

The CMA said it was aiming to publish its final report by the end of July.

Ladbrokes said: "this promotion code is a considerable action and our focus now will be on agreeing the shop disposals to satisfy the CMA." Ladbrokes shares had leapt 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" and that it would continue to work with the regulator on methods to accomplish final clearance.

Analysis: Frank Keogh, BBC Sport racing reporter:

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

While critics say the casino-style machines have motivated problem gamblers, the yohaig code bookmakers firmly insist personnel are trained to look out for problems.

The bottom line is the increase of the makers has actually assisted keep a lot 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 reveals there is lots of cash still to be made in the British betting industry.

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

"We expect considerable cost saving will be possible since there will be vast locations of overlap and unnecessary duplication of functions throughout the combined business," 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 company's shareholders backed the bet9ja's welcome offer in November.

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