Ladbrokes-Gala Coral merger faces delay in provisional decision from Competition and Markets Authority
The Competition and Markets Authority (CMA) has delayed a provisional decision on the merger of betting giants Gala Coral and Ladbrokes, an industry source has told City PM
The decision was expected to be announced on 18 April or soon after, but this deadline is now "highly unlikely", according to the source. The final decision on the merger, which will form new company Ladbrokes Coral, is still expected to be delivered on 24 June.
It is unclear why the provisional decision has been delayed, although the source told City PM it could relate to strict criteria about branch disposals that will be required for the deal to go through. The CMA is expected to specify exactly which branches will need to be sold.
The gambling majors expect to be instructed to dispose of between 300 and 500 branches between them to assuage concerns about competition. However, City PM understands the combined company may have to sell as many as 1,000 high street stores.
The CMA is likely to require the branches to be sold to smaller competitors, rather than being closed, in order to maintain high street competition.
Ladbrokes confirmed it would merge with rival Gala Coral in a £2.3bn deal last July.
With an expected 4,000 shops, Ladbrokes Coral would overtake William Hill – which has just under 2,400 shops in the UK – to become the biggest high street betting agent, with net revenues of £2.1bn.
The Ladbrokes Coral tie-up follows the merger between Paddy Power and Betfair, announced last September, that completed in February. The company became the world's largest listed online gambling company.
Consolidation in the gambling sector follows huge hits to profits in the wake of tightened regulation. Bookies were hit hard in their 2015 financial results by the first full-year application of the point-of-consumption tax, which charges 15 per cent on online gambling profits, and crackdowns on in-store fixed odds betting terminals (FOBTs).
Gala Coral and Ladbrokes declined to comment.