Ladbrokes and Coral merger: possible competition concerns
The Competition and Markets Authority (CMA) has published its provisional findings into the merger of the Ladbrokes and Coral betting businesses.
In a statement issued on 20 May 2016 the CMA said that the merger “may give rise to competition concerns” with regard to betting shops “in a large number of local areas”.
The CMA has listed two possible remedies to prevent the substantial lessening of competition (SLC) in the “supply of gambling products in licensed betting offices in Great Britain”:
2. Divestiture of one or more Ladbrokes LBOs and/or one or more Coral LBOs in each local area in which an SLC may be expected to result (note that, where such SLC areas overlap, it may be the case that divestiture of one LBO would remedy, mitigate or prevent the SLC or any resulting adverse effect in more than one area). The CMA states that between 350 and 400 betting shops might have to be sold for the merger to be conditionally cleared.
The provisional conclusions of the CMA regarding the merger are “that the Transaction may be expected to result in an SLC:
(a) within 659 local markets in Great Britain for the supply of gambling products in LBOs; and
(b) within the market for the supply of gambling products in Great Britain, as a result of the aggregated loss of competition at the local level.”
The CMA has extended the final deadline for its report until 19 August 2016.