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Ladbrokes and Coral merger cleared subject to shop sales

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Coral Ladbrokes: will have to sell between 350-400 shops to get the go ahead

Merger: will get the go ahead as long as 350-400 shops are sold

  PICTURE: Jay Vincent  

 By Bill Barber 7:14AM 20 MAY 2016 

THE £2.3 billion merger between Ladbrokes and Coral has been given the go ahead by the competition watchdog although they will have to sell 350 to 400 betting shops before it is cleared.

The figure is at the bottom end of the estimates that have been made in the lead up to the Competition and Markets Authority announcement on Friday.

The CMA said it had provisionally found that the merger may give rise to competition concerns “in a large number of local areas”.

Biggest betting shop chain

The merger between the two bookmakers would create Britain’s biggest betting shop chain with around 4,000 shops.

There had been some professionals who thought up to 1,000 shops would have to be sold in order for the deal to go through.

The group of independent panel members investigating the merger has identified 659 local areas where it provisionally found that the merger may be expected to result in a substantial loss of competition, which could lead to a worsening of the offer made to customers at both a local and national level.

As many of the problematic local areas overlap, the sale of a betting shop in one local area may also remedy the concerns in other areas.

Report deadline extended

The CMA said that the sales may have to be “substantially completed” before the merger can go ahead and has extended the deadline for its final report by eight weeks to August 19.

Inquiry chair Martin Cave 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.”

He added: “We’ll now consider responses to our provisional findings before coming to a final decision.

“If our provisional findings are confirmed and divestiture would be a suitable remedy, Ladbrokes/Coral may have to sell a large number of shops to a suitable purchaser or purchasers in order to preserve competition in those local areas.

“We’ll need to look closely at the exact number of shops and areas that would be involved – the overall size and complexity may mean that the sales need to be substantially completed before the merger can go ahead.”

Read the full story and reaction to the merger latest in Saturday’s Racing Post, available on iPad at 8pm this evening

 

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