Ladbrokes Coral on track for autumn merger as CMA confirms shop sales are required

By David Cook
As expected, the Competition and Markets Authority (CMA) has ruled that Ladbrokes and Gala Coral must sell around 350-400 shops in order to complete their planned merger.

The announcement is the CMA’s final report on the matter and where this report differs from its provisional findings published in May is that the situation has developed from Ladbrokes and Gala Coral possibly having to sell 350-400 shops to confirmation that the sale of those shops is required.

Martin Cave, Inquiry Chair, said: “Competition comes from the choice of shops in their local area and they would lose out from any reduction of competition and choice. Discounts and offers of free bets to individual customers are two of the ways betting shops respond to local competition which could be threatened by the merger. Such a widespread reduction in competition at the local level could also worsen those elements that are set centrally, such as odds and betting limits.

“Although online betting has grown substantially in recent years, the evidence we’ve seen confirms that a significant proportion of customers still choose to bet in shops - and many will continue to do so after the merger. We therefore believe that a sale of shops of this scale is needed to protect these customers.”

Gala Coral said: “Gala Coral Group welcomes the announcement by the CMA that the merger of the Coral Group with Ladbrokes PLC can proceed subject to the sale of between 350-400 shops. Discussions with potential buyers can now accelerate, and we remain on track to complete the merger in the autumn.”

The CMA has identified 642 local areas where competition could be substantially lessened as a result of the merger.

According to the latest Gambling Commission statistics, which report up to September 2015, Ladbrokes operates 2,150 premises in Great Britain, while Gala Coral operates 1,835 premises, giving them a total of 3,985 premises and a 45% share of the market.

Off course gross gaming yield (GGY) for the period from October 2014 to September 2015 totalled £3.06bn, while remote betting GGY from November 2014 to September 2015 was £4.13bn.

The CMA has published various letters from those concerned about the effects of the merger or the CMA’s investigation process, including the British Horseracing Authority and William Hill.

The latest announcement comes shortly after the one-year anniversary of the initial announcement of the planned merger on 24 July last year.


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