Speculation about 1,000-shop selloff was pessimistic
The proposed £2.3 billion merger of Ladbrokes and Gala Coral has been conditionally approved by the UK Competition and Markets Authority.
The merged company, to be named Ladbrokes Coral, must sell off between 350 and 400 high street betting shops across the UK to satisfy antitrust concerns. Earlier reports indicated that regulators would ask for the sale of up to 1,000 shops to prevent a perceived monopoly.
Despite the selloff, the merger will create Britain’s biggest bookmaker with around 3,600 betting shops after those assets are shed, topping William Hill’s 2,400 betting shops, reported SBC News. The CMA has identified 659 areas across the country where the deal could harm competition.
In a statement, Gala Coral said it will “continue to work with the CMA in order to agree the remedies.”
In its report, the CMA noted that the merger would change the UK betting industry at the retail level, and noted that the former “Big 4” bookies—now the “Big 3” of William Hill, Ladbrokes Coral and Betfred—will control 87 percent of UK betting shops. Any shop sales would have to be “substantially completed before the merger can go ahead,” the CMA said.
CMA Chairman Martin Cave said the authority still has concerns regarding the merger and its overall market impact. “Discounts and offers of free bets to individual customers are ways betting shops respond to local competition which could be threatened by the merger,” he said. “We’re also concerned that such a widespread potential reduction in competition at the local level could worsen those elements that are set nationally, such as odds and betting limits.”
Potential buyers of the shops could include Irish bookmaker Boylesports, which has been looking for a way to break into the UK market; as well as Betfred and Paddy Power.
