Operators Ladbrokes and Gala Coral have agreed the terms of a recommended merger to form Ladbrokes Coral plc.
The merger will be between Ladbrokes and the Coral Group, which is made up of certain businesses of Gala Coral, including Coral Retail, Eurobet Retail and Gala Coral’s online businesses.
Ladbrokes Coral will have net revenue of £2.1bn and EBITDA of £392m, excluding cost synergies of at least £65m.
Ladbrokes will issue new ordinary shares to Gala Coral shareholders representing 48.25% of the enlarged issued share capital of the combined entity.
The Coral Group will be delivered with net debt of £865m.
Peter Erskine, Ladbrokes chairman, said: "This is a major strategic step for Ladbrokes which firmly accelerates our strategy to improve the customers’ experience and build recreational scale. Ladbrokes and Coral are two highly complementary businesses, with rich heritage and brand presence across the UK and internationally.”
Following the completion of the merger, Ladbrokes CEO Jim Mullen will assume the position of CEO of the group, while Gala Coral CEO Carl Leaver will be executive deputy chairman for a term of 12 months.
Gala Coral chairman Rob Templeman will join the group’s board.
Templeman said: "Today’s announcement is testimony to the track record and achievements of the Gala Coral team in delivering a significant transformation of the business over the past four years. This strategic combination is a natural fit and will offer further opportunities for growth. Coral Group’s online strength and high street presence will complement Ladbrokes’ established brand and footprint in the UK and internationally.”
The deal is subject to approval from Ladbrokes shareholders and clearance from the Competition and Markets Authority.
Ladbrokes has also announced total headline operating profit of £41.7m for the half year ended 30 June, down 38% year-on-year.