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Ladbrokes-Gala Coral deal clearance may depend on store sales

Bookmakers Ladbrokes and Gala Coral might have to shed numerous shops if their proposed merger is to go on, the competitors guard dog has actually stated.

The Competition and Markets Authority said a merger of the UK's 2nd and 3rd biggest bookies may limit competitors on the High Street.

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

The CMA has actually offered until 13 June for reactions to its provisional findings.

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

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

Martin Cave, who is chairing the CMA's inquiry, stated: "We have actually provisionally found that the merger in between 2 of the largest bookmakers in the nation may be anticipated to minimize competitors and option for consumers in a a great deal of regional areas.

"Although online betting has actually grown substantially over the yohaig code last few years, the proof we have actually seen validates that a large number of customers still pick to wager in shops - and lots of would continue to do so after the merger.

"For these consumers, competitors originates from the yohaig code choice of stores in their city and it's they who might lose from any decrease of competitors and choice."

The CMA said it was aiming to release its last report by the end of July.

Ladbrokes said: "this promotion code is a substantial action and our focus now will be on agreeing the yohaig code shop disposals to satisfy the CMA." Ladbrokes shares had actually leapt 6.5% by the close of trade on Friday.

Gala Coral said it kept in mind that the CMA was "provisionally minded to clear the proposed merger" and that it would continue to deal with the regulator on ways to achieve last clearance.

Analysis: Frank Keogh, BBC Sport racing press reporter:

The face of Britain's betting stores has changed in the last 20 years - from smoky boltholes with horse racing controling procedures to glossy multi-screen sport outlets where fixed-odds betting terminals are a big earner.

While critics state the casino-style makers have actually motivated problem gamblers, the bookies firmly insist staff are trained to keep an eye out for issues.

The bottom line is the rise of the yohaig code devices has actually 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 predestined to be casualties, this proposed ₤ 2.3 bn merger reveals there is lots of money still to be made in the British betting market.

Analysts state the merged business will still have a dominant position even if numerous shops need to be sold.

"We anticipate considerable expense saving will be possible because there will be large areas of overlap and unneeded duplication of functions throughout the combined organization," said Steve Clayton, head of equity research at Hargreaves Lansdown.

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

Ladbrokes profits struck by writedowns

11 August 2015