As initially expected, the Competition and Markets Authority (CMA) has decided that between 350 and 400 shops must be sold by Ladbrokes and Gala Coral in order for them to get a regulatory approval of their merger. This way, the merger between the two companies is set to be finalised in the autumn of 2016.
The Inquiry Chair of CMA Martin Cave commented on the final decision of the watchdog, saying that it is the variety and large choice of betting shops in the local areas which make the competition. According to him, an eventual merger would threaten the competition as discounts and promotional offers would be probably hurt by a tie-up.
Up to date, Ladbrokes and Gala Coral are the second and third largest retail bookmaking operators on the territory of the UK by the number of their licensed betting shops. The betting shops operated under the Ladbrokes’ brand amount to 2,150 in Great Britain and 77 in Northern Ireland. Coral, on the other hand, has about 1,850 betting shops on the territory of the UK to date.
Both companies also currently provide a large number of “on-course” betting options and a variety of betting and gaming products offered by telephone and over the Internet. Each of the above-mentioned entities also runs 2 greyhound tracks.
Today, the Competition and Markets Authority published its final judgement on the matter. The body explained that the responses to its tentative findings that were published in May this year were taken into account, and so were the evidence found. After its investigation was complete, the CMA found a total of 642 local areas, where the competition could be substantially hurt by the future merger of the second and the third largest betting operators in the UK.
The Competition and Markets Authority started investigating the planned merger in December 2015. Later, in May 2016, the regulatory body found that the two companies could be forced to sell up to 400 betting shops. The watchdog’s final statement on the matter states that the tie-up could result in worsening the consumer choice in both the racing and greyhound industries both locally and in the country as a whole.
So, in order to preserve competition for the customers’ sake in the local areas, Ladbrokes and Gala Coral will be forced to sell up to 400 betting shops to one or more up-front buyers that will also need the regulatory approval of CMA to purchase the licensed betting offices. The watchdog also set a requirement, according to which the merger will be permitted to the two betting operators in case that the sales are substantially completed.
Gala Coral also commented on the regulatory dog’s final ruling on the case, saying that the company welcomed the announcement. The UK third-largest betting operator explained that the merger with Ladbrokes remained on track to be finalised in the autumn, so negotiations with potential buyers could advance.
- Author
Olivia Cole
