Ladbrokes-Gala Coral deal clearance may depend upon shop sales

Bookmakers Ladbrokes and Gala Coral may have to shed numerous shops if their proposed merger is to go ahead, the competition watchdog has stated.

The Competition and Markets Authority said a merger of the UK's second and 3rd largest bookies may limit competition on the High Street.

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

The CMA has provided up until 13 June for reactions to its provisionary findings.

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

the yohaig code combined group would make it larger than current market leader William Hill.

Martin Cave, who is chairing the CMA's questions, said: "We have actually provisionally discovered that the merger between 2 of the biggest bookmakers in the country might be expected to reduce competition and choice for consumers in a big number of areas.

"Although online wagering has actually grown significantly recently, the evidence we have actually seen validates that a large number of clients still pick to bet in shops - and numerous would continue to do so after the merger.

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

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

Ladbrokes stated: "this promotion code is a substantial action and our focus now will be on concurring the store disposals to satisfy the CMA." Ladbrokes shares had leapt 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 work with the regulator on methods to accomplish last clearance.

Analysis: Frank Keogh, BBC Sport racing press reporter:

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

While critics state the casino-style makers have actually encouraged issue bettors, the bookies firmly insist personnel are trained to look out for issues.

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

And while some shops look destined to be casualties, this proposed ₤ 2.3 bn merger reveals there is a lot of money still to be made in the British betting market.

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

"We anticipate considerable expense conserving will be possible because there will be vast areas of overlap and unneeded duplication of functions throughout the combined business," 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 deal in November.

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11 August 2015