In order to resolve these concerns, around 350 to 400 shops may have to be sold for the merger to be conditionally cleared, if the Competition and Markets Authority’s (CMA) final report were to confirm its provisional findings and divestiture would be a suitable remedy.
Ladbrokes plc (Ladbrokes) and Gala Coral Group Limited (Coral) are, respectively, the second and third largest bookmakers in the UK by number of shops, known as licensed betting offices. They also provide betting and gaming products online, ‘on-course’ at certain racecourses, and by telephone, as well as each operating 2 greyhound tracks.
Ladbrokes operates 2,154 betting shops in Great Britain and 77 in Northern Ireland and Coral operates around 1,850 betting shops in Great Britain.
The group of independent panel members investigating the merger has looked in detail at the large number of areas where Ladbrokes and Coral shops compete. In a
published today, the group 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 well as its provisional findings, the group has published a
which asks for views on whether divestiture would be a suitable remedy. It also notes that, as many of the problematic local areas overlap, divestiture of a betting shop in one local area may also remedy the concerns in other areas.
The notice also states that the CMA is minded to require any divestiture, were that to be a suitable remedy, to be substantially completed before the merger can go ahead. The CMA has
for its final report by 8 weeks to 19 August 2016 (see notes to editors) in view of the scope and complexity of the investigation which involves numerous local areas. The group, however, is aiming to publish its final report by the end of July 2016.
The CMA has not found competition problems that may be expected to arise from the merger in relation to other parts of the 2 businesses.
Martin Cave, Inquiry Chair, said:
We’ve provisionally found that the merger between 2 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. Discounts and offers of free bets to individual customers are ways betting shops respond to local competition which could be threatened by the merger. We’re also concerned that such a widespread potential reduction in competition at the local level could worsen those elements that are set nationally such as odds and betting limits.
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.
The full provisional findings report will be published shortly. All information relating to the investigation is available on the investigation case page.
Anyone wishing to respond to the provisional findings should do so in writing, by no later than 13 June 2016. Anyone wishing to respond to the notice of possible remedies should do by 6 June 2016. Please email firstname.lastname@example.org or write to:
Ladbrokes/Coral merger inquiry
Competition and Markets Authority
Notes for editors
- The CMA is the UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law.
- The Ladbokes/Coral inquiry group consists of Martin Cave (Inquiry Chair), John Harley, Andrew Popham and Gavin Robert.
- The CMA referred the merger for an in-depth phase 2 investigation in January 2016, having fast-tracked the reference at the request of the companies.
- The CMA can extend the deadline for a phase 2 merger investigation by no more than 8 weeks if the CMA considers that there are special reasons why the report cannot be published within the original statutory period of 24 weeks beginning with the date of the reference.
- All the CMA’s functions in phase 2 merger inquiries are performed by independent inquiry groups chosen from the CMA’s panel members. The appointed inquiry group are the decision-makers on phase 2 inquiries.
- The CMA’s panel members come from a variety of backgrounds, including economics, law, accountancy and business; the membership of an inquiry group usually reflects a mix of expertise and experience (including industry experience).
- For more information on the CMA see our homepage or follow us on Twitter @CMAgovuk, Flickr and LinkedIn. Sign up to our email alerts to receive updates on mergers cases.
- Enquiries should be directed to Siobhan Allen email@example.com, 020 3738 6460) or Rory Taylor (firstname.lastname@example.org, 020 3738 6798).