Can Ladbrokes, Gala Coral afford to lose 1,000 shops?

Can Ladbrokes, Gala Coral afford to lose 1,000 shops?

Friday, April 15, 2016 Totally Gaming
The operators could be forced to get rid of a quarter of their LBOs if they are to merge

Ladbrokes and Gala Coral could be forced to sell a quarter of their combined 4,000 properties if they are to complete their proposed merger.

The UK’s Competition and Markets Authority (CMA) regulator has delayed a provisional ruling on the proposed merger between the companies, with a source reported in the City AM newspaper citing issues regarding branch disposal as a possible reason behind the decision.

City AM said that Gala Coral and Ladbrokes had been expected to offload between 300 and 500 of their land-based branches for the deal to go through, but that figure could now be much higher and the body is likely to insist that the branches be sold off to smaller competitors. The regulator is also expected to specify which branches need to be sold to satisfy any concerns it has over the planned merger.

Rival William Hill was among those that urged the regulator to reject the proposed merger over fears it could negatively affect competition in the UK industry.

While an initial decision due to be released on April 18 will now be delayed, sources say that the final decision is still on track for the June 24 deadline, with both operators confident the deal will be given the green light.

TotallyGaming.com says: “Ladbrokes and Gala Coral involved the CMA as early as they could when they first began formal talks over a merger last year, but it seems their inclusive approach has not won any favours. Ladbrokes is clearly pushing its digital offering under Jim Mullen, but the loss of a quarter of the proposed company’s shops will be a big hurdle to overcome.” 

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