The Competition and Markets Authority in the United Kingdom has given the go-ahead for the merger between Ladbrokes and Gala Coral, which had looked in some doubt at one stage. The new company will be worth around £2.3 billion and will include more than just the Coral bookmakers. Other parts of the business including the Eurobet Retail are included in the deal.
When the merger was first mooted the CMA felt that Ladbrokes and Coral would need to sell between three hundred and fifty and four hundred shops between them in order to reduce competition concerns around the country. The two businesses have decided to sell three hundred and fifty-nine, which is enough to mean that the CMA is happy for the merger to go ahead without compromising competition.
Getting Back Into The ‘Premium Listing’
In the wake of the approval of the merger, Ladbrokes created a prospectus which was aimed at ensuring that the new company could be readmitted into the ‘premium listing segment of the Financial Conduct Authority’s Official List’. This would ensure that it would be able to trade on the London Stock Exchange, which is where the valuation of £2.3 billion has come from.
The likelihood is that the newly formed company will have no problems getting onto the Official List, given that they are amongst the best-known brands in the betting world. As the combined group’s new Chairman John Kelly put it, “we are bringing together some of the best known and admired brands in betting and gaming.”
What Had To Be Done To Allow The Merger
It wasn’t all plain sailing for the two companies to combine their might, as you would expect for such a huge merger. Back in July the Competition and Markets Authority said that shops would need to be sold before the merger could go ahead. It’s little surprise, considering that individually Ladbrokes and Gala Coral were third behind only William Hill in terms of the country’s largest retail betting firms.
Ladbrokes boasts more than two thousand shops, whilst Coral have over one thousand eight hundred. The owner of Befred, Fred Done, has agreed to buy three hundred and twenty-two shops, whilst Stan James will be buying thirty-seven. It will cost the two companies £55.5 million to buy the shops, which they will doubtless see as a bargain considering the foothold it will give them both in the market.
New Company Will Be Called Ladbrokes Coral Group
The merger of the two firms, which was finalised on the first of November 2016, will result in the birth of a new company bearing the moniker of Ladbrokes Coral Group. Kelly said:
We believe that no other gambling business has such a strong heritage, with brands that enjoy such broad appeal and a presence that is woven into the fabric of the UK culture as well as overseas regulated markets.
There was certainly no intention for the new business to rest on its laurels as far as Kelly was concerned, stating that the plan is for them to ‘grow the business building on our scale’. The hope is that Ladbrokes Coral Group can develop their international presence thanks to the strong management team that is already in place to do just that. They have a ‘clear focus’ to develop new opportunities.
A ‘Historic Day’
The Ladbrokes Coral Group’s new Chief Executive, Jim Mullen, said that he thinks it is an ‘historic day for the company’ and that it marks the start of ‘an exciting journey’ that the business will go on. He also praised both Ladbrokes and Gala Coral for their willingness and ability to ‘compete hard and win’ in what is an ‘increasingly competitive market’.
It was a thought that was echoed by Carl Leaver, the group’s Executive Deputy Chairman. He made reference to the ‘new and exciting opportunities’ that the merger will lead to. He was also quick to point out that Jim Mullen’s leadership will ensure that Ladbrokes Coral Group will be in a position to ‘make our ambition of creating the UK’s leading betting and gaming business a reality’.