Ladbrokes Coral Merger Raises Concerns For The Industry

ladbrokes coral mergerLadbrokes and Gala Coral are continuing to pursue their merger, in the face of criticism and concern from major voices in the industry. William Hill is one of those who has been severely critical of the merger, claiming the deal would cause a “substantial lessening of competition” within the UK gambling market.

William Hill have even filed a submission with the UK Competition and Markets Authority (CMA), urging the regulator to stop the proposed merger and help sustain the UK industry. The CMA had previously rejected a similar proposal between Ladbrokes and Coral in 1998.


Ladbrokes/Coral Merger Returns

However, the CMA has yet another ruling on theLadbrokes Coral Merger merger, which is expected to take place by the 24th June, with the investigation having been put through a fast track.

If the merger were to be successful, Ladbrokes Coral would be worth around £2.3 Billion. This would be made up of not only a strong online presence from both companies, but would include 4,000 high street shops throughout the UK.


The Big Problem

The major concern among critics, with their most vocal critic being competitor William Hill, is that a merger of this scale would create an noncompetitive concentration of monopolies. Ladbrokes and Coral have defended their move, by pointing out that the industry has changed drastically in the last few years.

The number of large scale mergers and acquisitions has bpaddy power betfair logoeen on the up as of late, with GVC Holdings having bought Bwin Party only at the end of last year. Paddy Power Betfair is the most notable merger from last year, between Paddy Power and Betfair. Their merger totaled a value of £5 Billion, which is over double what the Ladbrokes and Coral merger is worth.

The Ladbrokes Coral argument is that the scenario William Hill is worried about has already happened and now mergers are actually the only way to stay competitive in the current climate.


Awaiting The CMA Judgement

CMAWe won’t know the final result until the CMA judgement happens in the next few months. We can only imagine that whatever it is, Ladbrokes and Coral will try again.

However, we have already heard some voices raised from the CMA, more recently than the first denial of the merger back in ’98.

Last month, the executive director of markets and mergers at the CMA, Andrea Coscelli, mirrored William Hill’s concerns. “As the second and third largest bookmakers in the country in terms of betting shops, the merger could affect competition in the very large number of areas where their shops overlap”.

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