Global gaming group GVC and UK bookmaker Ladbrokes Coral have now agreed a £4bn merger deal following months of speculation.
Under the agreed deal, GVC has valued the firm at 160.9p a share, with additional loan notes included at an extra 42.8p per share. The companies said the merger would result in cost savings of at least £100m a year.
This merger would lead to GVC owning 53.5% of the combined group, with Ladbrokes Coral shareholders owning 46.5%; GVC Chief Executive Kenneth Alexander will be heading up the combined group.
Existing Ladbrokes Coral shareholders will be entitled to 32.7p in cash, a further 0.141 ordinary shares in GVC and a contingent entitlement of up to a further 42.8p.
However, both companies have confirmed that the final acquisition cost is dependent on the outcome of the UK government’s long-awaited triennial review into the gambling industry, where it is expected to announce the implementation of restrictions on fixed odd betting terminals.
At present, GVC employs 2,800 staff and contractors in 15 offices internationally, while Ladbrokes has over 3,700 betting shops employing more than 25,000 staff around the UK.
Releasing a joint statement on the acquisition agreement on the GVC website, Kenneth Alexander, CEO of GVC said: "The creation of one of the world’s largest listed sportsbetting companies, combining a portfolio of established brands, proven technology and leading market positions in multiple geographies, is a truly exciting prospect.
“GVC has a proven track record of creating shareholder value through the successful integration of acquired businesses and the GVC Board believe this transaction will create further value for our shareholders and those of Ladbrokes Coral."
John Kelly, Chairman of Ladbrokes Coral added: "The Ladbrokes Coral Board believes that the proposed combination with GVC accelerates our strategy to improve the customer experience, drive faster online growth and build a more diverse and extensive international portfolio of businesses.
“The acquisition has compelling strategic rationale allied to an opportunity to use the best of both from proven management teams and will create material shareholder value. It secures earlier delivery of our long-term value potential, which is why the Board of Ladbrokes Coral has unanimously recommended GVC's offer."