Fri, 20 May 2016 | MERGER
The proposed £2.3 billion merger between betting giants Ladbrokes and Gala Coral may force the sale of around 400 UK high street shops.
The Competition and Markets Authority (CMA), which regulates the sector, have identified “concerns in a large number of local areas” and “substantial loss of competition” during its initial probe into the proposed mega-merger between the UK bookmakers.
The CMA found no other objections to the deal but stated its concerns over the physical stores. Between them, Ladbrokes and Gala Coral have around 4,000 betting shops across the UK, so the merger would instantly create the largest high street betting chain.
Martin Cave, the CMA chair, said: "We’ve provisionally found that the merger between two of the largest bookmakers in the country may be expected to reduce competition and choice for customers in a large number of local areas.
"Although online betting has grown substantially in recent years, the evidence we’ve seen confirms that a large number of customers still choose to bet in shops — and many would continue to do so after the merger.
"For these customers, competition comes from the choice of shops in their local area, and it’s they who could lose out from any reduction of competition and choice.”
The CMA will now seek responses from the industry in regards to its provisional probe, before making a final decision on the merger by 19 August 2016. This date has already been extended by eight weeks due to the immense scale of the proposed remedies suggested by the regulator.
The competition authority added that the majority of store sales would need to happen before it would give the go-ahead for the merger between Ladbrokes and Gala Coral.
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