UK: Ladbrokes merger set to raise competition issues

Ladbrokes shares leapt yesterday as investors cheered plans for a possible £4 billion merger with Gala Coral despite competition concerns over the tie-up to create Britain’s biggest bookmaker. Ladbrokes said it was in early discussions with Gala to merge, forming a business with nearly 4,000 high-street betting shops.

The combined group would overtake William Hill as the biggest gambling firm in the UK, with experts estimating it would be worth close to £4bn. It would bring together around 2,100 shops from Ladbrokes and 1,845 from Coral.

But the deal raises possible competition concerns over a tie-up between the second- and third-largest bookmakers in Britain and brings back memories of an attempt by Ladbrokes to snap up Coral 17 years ago.

Ladbrokes tried to buy its smaller rival in 1998, but was forced to give up after the then British trade and industry minister Peter Mandelson said the deal had to be unwound on competition grounds and fears it would disadvantage punters.

The Guardian said the two firms may be forced to sell as many as 15 per cent of the shops to appease competition authorities.

Full content: The Guardian

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