After 18 long months of negotiations, Ladbrokes have finally completed their merger with Gala Coral. The new company have adopted the name Ladbrokes Coral Plc, and are valued at £2.3 billion. The company will the UK’s biggest retail bookmaker, with a combined portfolio of more than 3,500 betting shops. The merger was previously attempted in 1998, and this time around has been in the pipeline since July last year. It was postponed by the CMA (Competition and Markets Authority) due to fears of causing a monopoly. This led to the sale of over 350 of the two companies' betting shops. Now finally completed, the newly formed gambling giant will move for a premium listing on the London Stock Exchange.
The Details Of The Merger
It's been a rocky (and long) road in merging these two UK bookmaker behemoths, but the completion marks the start of a new era – and the newly formed company looks set to take on it's rivals.
The new company will retain a number of Gala Coral businesses, such as Coral Retail, Eurobet and the bookmaker's online sites. Collectively, Ladbrokes Coral now holds 3,500 betting shops across the UK, which accounts for 41% of the market.
The merger has been delayed several times over fears that it could lead to a monopoly and cause a loss of competition within the UK gambling market. The prominence of both brands was a major concern for the CMA, and they therefore imposed a requirement that the two companies close 359 of their betting shops.
Even with the closures, the merger means that the company have overtook William Hill as the market leader, and they're certainly going to be a force to be reckoned with in the online casino world.
The Age of Mergers and Acquisitions
The Ladbrokes Coral merger is not only historic in itself, but it follows a more general trend within the gambling market. Over the past year we've seen many companies merge or acquire smaller companies, and it looks to be like the only way forward in the current gambling environment.
Mergers allow companies to pool their resources, but also allow them to become bigger players on the stock exchange. Most of the time, a merger will happen without regular customers even knowing, as they will continue to operate as separate brands. This allows the company to keep their familiarity and therefore, keep their customer base intact.
The new chairman of Ladbrokes Coral Plc, John Kelly said this of the merger: ‘in uniting these two businesses we are bringing together some of the best known and admired brands in betting and gaming. 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.'