Rank Gala deal referred to Competition Commission

Rank Gala deal referred to Competition Commission

Tuesday, August 21, 2012

Rank Group's proposed £205m acquisition of the gambling firm Gala Coral has been referred to the UK's Competition Commission for scrutiny. Discussing the takeover, the Office of Fair Trading said the move would leave only two large national casino operators – Rank and Malaysian firm Genting, adding that rivals would also face 'considerable challenges' breaking into the sector.

Ali Nikpay, senior director at the watchdog, said: “Rank and Gala are two of only three large national casino operators in the UK. This merger would represent a major consolidation which could be expected to reduce competition, both locally and nationally.

“The high barriers to entry and expansion in the casino sector mean the loss of competition could potentially be irreversible.”

Both Rank and Gala Coral said yesterday that they would consider the implications of OFT’s move before commenting further. A decision is expected by February.

ANALYSIS
With 34 casinos trading under Rank's Grosvenor and GCasino brands, the operator is already the UK's second-largest casino company. Only Genting, run by Malaysia's Lim Kok Thay, is bigger. The addition of Gala casinos would add a further 23 sites, giving Rank a 40pc share of UK casinos. The group also holds licences for further casinos, as does its controlling shareholder, Quek's conglomerate Guoco.

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