Possible Ladbrokes and Gala Coral Merger?
Confirmation has been given that two giant UK betting firms are talking about a possible merger. However, it seems as though any conclusion to the talks is still some way off.
Speculation about a deal between Ladbrokes and the Gala Coral Group had been building since The Racing Post had first mentioned the possibility earlier in the week.
The news has now been confirmed by Jim Mullen, who is the CEO of Ladbrokes. He brought out a statement saying that any merger between the two could be something that creates “a combined business with significant scale”.
He went on to say that this merger has “the potential to generate substantial cost synergies"
and create shareholder value on both sides.
It is thought that the discussions between the two companies are still in the early days. If it does happen that it will create the biggest network of UK betting shops. The combination of the two companies would give them about 4000 betting shops across the country The next biggest entity is William Hill, with around 2,300.
Similar discussions between these betting firms happened back in 1998. In that case, a Ladbrokes takeover of Gala Coral didn't due to concerns about it being bad news for the market to be dominated so much by the new group.
One of the possible reasons why some UK betting companies are thinking of consolidating just now is the new 15% POCT, which is the online point of consumption tax that was recently brought into play.
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