The UK Competition and Markets Authority has approved GVC’s acquisition of Ladbrokes Coral clearing the way for the merger to be completed.
The merger’s financing plan has also been approved by the UK High Court.
The authority conducted an investigation and concluded that since GVC products are almost entirely online and the company has only a small presence in the UK the merger would not hurt competition in the country.
“We looked closely at betting services for individual sports and individual games but found that, in all cases, there will be enough rivals to the merged entity to prevent price increases or a reduced quality of service as a result of the merger,” the authority said in its decision. “GVC has a small presence in the UK and only offers services online. The CMA has found that GVC and Ladbrokes are not close rivals and there are many other providers of betting and gaming services online. The merger will therefore not be referred for an in-depth investigation.”
GVC will now pay £3.2bn for Ladbrokes Coral in cash and shares. The final price, however, is dependent on the UK government’s final decision on a maximum stake for fixed odds betting terminals. The government is cutting the maximum bet allowed on FOBTs to somewhere between £50 and £2.
If the stake is cut to £2, GVC will not pay more for the company, but the deal includes a sliding scale. For example, if the stake is cut to £50 the total cost could increase to £4bn.
