LONDON (Alliance News) - The UK Competition & Markets Authority on Friday said it has provisionally found that the merger between betting companies Ladbrokes PLC and Gala Coral may give rise to competition concerns in a large number of local areas.
In order to resolve the concerns, around 350 to 400 betting shops may have to be sold for the merger to be conditionally cleared, the CMA said.
Ladbrokes and Gala Coral are the second and third largest bookmakers in the UK by number of shops. Ladbrokes operates 2,154 betting shops in Great Britain and 77 in Northern Ireland, while Gala Coral operates around 1,850 betting shops in Great Britain.
The CMA said it has identified 659 local areas where it provisionally found that the merger may be expected to result in a substantial loss of competition, which could lead to a worsening of the offer made to customers at both a local and national level.
The CMA has extended its deadline for its final report by eight weeks to August 19 "in view of the scope and complexity of the investigation", although it is aiming to publish the final report by the end of July.
The CMA said it has not found competition problems that may be expected to arise from the merger in relation to other parts of the two businesses.
"We'll now consider responses to our provisional findings before coming to a final decision. If our provisional findings are confirmed and divestiture would be a suitable remedy, Ladbrokes/Coral may have to sell a large number of shops to a suitable purchaser or purchasers in order to preserve competition in those local areas. We'll need to look closely at the exact number of shops and areas that would be involved - the overall size and complexity may mean that the sales need to be substantially completed before the merger can go ahead," Inquiry Chair Martin Cave said in a statement.
Ladbrokes and Gala Coral agreed the merger in July last year. It will create a company, to be called Ladbrokes Coral PLC, with a market capitalisation of around GBP2.1 billion and the largest bookie retail estate in the UK.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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