Ladbrokes-Gala Coral deal clearance might depend upon store sales

Bookmakers Ladbrokes and Gala Coral may need to shed hundreds of stores if their proposed merger is to proceed, the competition watchdog has stated.

The Competition and Markets Authority said a merger of the UK's 2nd and 3rd biggest bookies might limit competition on the High Street.

About 350 to 400 stores might need to be sold "for the merger to be conditionally cleared", the CMA stated.

The CMA has actually provided until 13 June for responses to its provisional findings.

Ladbrokes runs 2,154 wagering shops in Great Britain and 77 in Northern Ireland, while Gala Coral runs about 1,850 wagering shops in Great Britain.

The combined group would make it bigger than existing market leader William Hill.

Martin Cave, who is chairing the yohaig code CMA's query, stated: "We've provisionally discovered that the merger in between two of the biggest bookies in the country might be expected to lower competition and option for customers in a large number of local areas.

"Although online wagering has grown significantly in current years, the proof we've seen verifies that a a great deal of clients still pick to bet in stores - and many would continue to do so after the merger.

"For these consumers, competitors comes from the option of shops in their area and it's they who might lose out from any reduction of competition and choice."

The CMA stated it was intending to publish its last report by the end of July.

Ladbrokes said: "This is a considerable action and our focus now will be on concurring the shop disposals to satisfy the CMA." Ladbrokes shares had leapt 6.5% by the close of trade on Friday.

Gala Coral stated it kept in mind that the CMA was "provisionally minded to clear the proposed merger" and that it would continue to deal with the regulator on methods to achieve final clearance.

Analysis: Frank Keogh, BBC Sport racing reporter:

The face of Britain's wagering shops has changed in the last twenty years - from smoky boltholes with horse racing dominating proceedings to glossy multi-screen sport outlets where fixed-odds wagering terminals are a huge earner.

While critics say the casino-style makers have actually motivated issue gamblers, the bookies firmly insist staff are trained to keep an eye out for problems.

The bottom line is the increase of the makers has actually assisted keep a number of these shops open in a modern-day betting world where online gaming has mushroomed.

And while some shops look predestined to be casualties, this proposed ₤ 2.3 bn merger reveals there is lots of money still to be made in the British wagering market.

Analysts say the merged business will still have a dominant position even if lots of shops have actually to be sold.

"We anticipate considerable expense saving will be possible since there will be large areas of overlap and unneeded duplication of functions throughout the yohaig code combined company," said Steve Clayton, head of equity research study at Hargreaves Lansdown.

Ladbrokes agreed the terms of a ₤ 2.3 bn all-share merger with Coral in July, and the business's shareholders backed the handle November.

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