Ladbrokes and Coral Merger
Ladbrokes and Coral merger receives green light following important decision
There has been a proposed merger occurring with Ladbrokes and Gala Coral that has received a lot of attention and scrutiny. This merger is evaluated at about $3.4 billion and would be one of the largest gaming mergers in the United Kingdom ever. It looks as though they may finally be able to move forward with plans regarding the merge after reaching an agreement to sell off a bunch of betting shops that are owned by the company.
The request to sell the shops comes from the Competition and Markets Authority, and has been a major roadblock for these two companies and the merge. It’s been a back and forth battle of negotiations, and the settlement would involve Ladbrokes and Coral to sell somewhere between 350 and 400 of their betting shops before the merge can be completed.
This may seem like a big number, and it’s definitely not something the companies are happy about, but Ladbrokes currently owns over 2,100 betting shops around the United Kingdom. Coral owns and operates about 1,850 betting shops in the region. A merge between these two companies would result in them owning a little over 4,000 betting shops through the UK, which is a very impressive amount. When compared to the 400 that might need to be sold off, this is only 10% of the total owned betting shops.
This doesn’t necessarily mean a 10% loss in combined profits. Rather, the companies can choose to sell off their worst revenue shops, which could lead to a very slim loss in regards to profit. The merge that would create 4,000 betting shops under the operation of a single company would dwarf the largest competitor on the scene, William Hill, who owns about 2,370 betting shops in the UK.
The CMA’s request for the betting shops to be sold started back in April of 2015, and came as a result of the fear that the merge would create a superpower in the world of United Kingdom betting shops. It would extinguish healthy competition, which is why the original request was that the companies sell off 1,000 of their highest grossing betting shops. This would ensure that a healthy level of competition
remains and that a monopoly isn’t developed as a result of other businesses being unable to keep up with the market.
After this original request, the CMA went a bit further and created a list of 642 markets that would be directly affected by the merge between the two companies. It was going to eliminate a lot of the competition and require that a lot of operators sell off their betting shops because the market was too dominated by the new merged company.
Despite all this, Ladbrokes and Coral are being asked to sell only a small fraction of the betting shops that they were originally being told were needed to go in order to keep a strong, competitive market. The companies are likely very happy with the outcome.