Ladbrokes-Gala Coral must sell 350-400 shops to clear merger
Bookmakers Ladbrokes and Gala Coral must sell about 350-400 shops in order for their £2.3bn merger to be cleared, the competition regulator has said.
The Competition and Markets Authority identified 642 local areas where it said the merger would hit competition.
Ladbrokes and Gala Coral are the UK's second and third largest retail bookmakers, behind William Hill.
Ladbrokes has about 2,150 outlets in Britain and 77 in Northern Ireland. Coral runs 1,850 shops in Britain.
A merger between Ladbrokes and Gala Coral would make it the UK's largest bookmaker.
However, on Monday, the current market leader, William Hill, was approached by rival gambling companies 888 and Rank Group about a merger.
The sale of up to 400 shops is the same figure suggested by the CMA in May, when it published its provisional findings into the Ladbrokes-Gala Coral deal.
Announcing the final report, Martin Cave, chair of the CMA's inquiry, said: "We've found that the merger between two of the largest bookmakers in the country would 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 significant proportion of customers still choose to bet in shops - and many will continue to do so after the merger. We therefore believe that a sale of shops of this scale is needed to protect these customers.
"It is now for the parties to propose a divestment package and one or more suitable purchasers for the CMA to approve."
Ladbrokes agreed the terms of the all-share merger with Coral in July, and the company's shareholders backed the deal in November.
Gala Coral has been owned by a group of private equity firms, including Apollo Global Management, Cerberus Capital Management, Anchorage Capital Partners and Park Square Capital, since 2010, when it collapsed under £2.5bn of debt.
Under the terms of the deal, those private equity owners will own 48.25% of the new company's shares, with the remainder being held by Ladbrokes shareholders.