The long awaited merger between Ladbrokes and Gala Coral has finally been approved by the Competition and Markets Authority (CMA). The agreed merger has come at a cost however, with the two companies ordered to sell off 400 of their high street bet shops before the merger can go through.
The merger had been previously attempted back in 1998 and has been in the pipeline once again since July last year. It has been postponed by the CMA amid fears of the merger causing a monopoly, a worry that the bet shop sale condition has apparently solved.
Preventing A Ladbrokes Coral Monopoly
Collectively, Ladbrokes Coral would hold 4,000 high street betting shops, which makes up 46% of the 8,819 betting shops in operation within the UK. Critics, which included the CMA itself, had feared that any agreed merger would cause a loss of competition within the betting shop market, due to the prominence of both brands.
Currently, it isn't known if Ladbrokes and Coral will agree to the conditions in order to finalise the merger. Given their persistence in attempting to complete the merger, it may very well be the case that they accept the conditions, but we'll have to wait for that news.
It appears we won't be waiting long, as the CMA has extended the deadline for the final decision up to August 19th, after which the deal will leave the table. It's expected for the decision to be known by the end of July.
The Era of The Merger
Mergers continue to look like the way forward in order to survive in the current gambling environment. This is the first case where we've heard a merger being too powerful and having to make asset cutbacks before being allowed.
We'll hear the decision from Ladbrokes Coral before the end of the August. With their hands tied to such an extent, it'll be interesting whatever the decision is. Nonetheless, if these two industry giants ever merge together, it's sure to cause waves across the whole industry.