Ladbrokes-Gala Coral deal clearance may depend upon store sales

Bookmakers Ladbrokes and Gala Coral may have 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 third biggest bookmakers might limit competition on the High Street.

About 350 to 400 stores might have to be offered "for the merger to be conditionally cleared", the CMA said.

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

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

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

Martin Cave, who is chairing the CMA's query, said: "We've provisionally discovered that the merger between 2 of the largest bookmakers in the country might be expected to reduce competitors and choice for customers in a large number of local areas.

"Although online betting has actually grown significantly recently, the proof we've seen verifies that a large number of customers still pick to wager in shops - and many would continue to do so after the merger.

"For these consumers, competition originates from the option of stores in their local location and it's they who could lose out from any reduction of competition and choice."

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

Ladbrokes said: "this promotion code is a substantial action and our focus now will be on concurring the store disposals to satisfy the CMA." Ladbrokes shares had actually jumped 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" which it would continue to work with the regulator on methods to attain last clearance.

Analysis: Frank Keogh, BBC Sport racing reporter:

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

While critics state the casino-style devices have encouraged issue gamblers, the bookmakers firmly insist staff are trained to keep an eye out for concerns.

The bottom line is the rise of the makers has helped keep a number of these stores open in a modern-day betting world where online betting has actually mushroomed.

And while some stores look destined to be casualties, this promotion code proposed ₤ 2.3 bn merger shows there is lots of cash still to be made in the British wagering industry.

Analysts say the merged business will still have a dominant position even if lots of stores need to be offered.

"We expect significant expense saving will be possible due to the fact that there will be large areas of overlap and unnecessary duplication of functions across the combined business," said Steve Clayton, head of equity research study at Hargreaves Lansdown.

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

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