Betting giants Ladbrokes and Gala Coral have announced a monumental merger, creating the UK’s largest bookmaker. This $3.4 billion deal will form Ladbrokes Coral, a new entity poised to dominate the British gambling landscape, combining extensive retail presence with a growing online footprint.
A New Era for UK Betting
On Friday, July 24, Ladbrokes plc and Gala Coral confirmed their merger, a strategic move that will establish a formidable new company, Ladbrokes Coral. This union is valued at $3.4 billion and is set to reshape the competitive landscape of the UK betting industry.
- Ownership Structure: Ladbrokes’ current shareholders will hold 51.75% of the new company, while Gala Coral’s shareholders, including private equity funds Anchorage Capital Partners and Apollo Global Management, will control the remaining 48.25%.
- Leadership: Jim Mullen, current CEO of Ladbrokes, will lead Ladbrokes Coral as CEO. Carl Leaver, Gala Coral’s current CEO, will serve as Deputy Chairman for at least 12 months. John M. Kelly will become the non-Executive Chairman, and Paul Bowtell will continue as Chief Financial Officer.
- Funding: The merger will be partly funded by the issuance of 93 million new shares by Ladbrokes, representing 10% of the company.
Strategic Rationale and Market Impact
Ladbrokes Chairman Peter Erskine emphasized that the merger is a significant strategic step, aiming to enhance customer experience and build recreational scale. The combined entity will leverage the rich heritage and brand presence of both companies, creating a multi-channel offering with extensive national and international coverage.
This merger will bring together Ladbrokes’ 2,100 shops and Coral’s 1,845 shops. While the final number of betting shops post-merger is subject to review by Britain’s Competition and Markets Authority (CMA) and potential closures for cost-cutting, the new company is still expected to be the UK’s largest bookmaker, surpassing current leader William Hill.
Expanding Horizons: Online and International Presence
Gala Coral Chairman Rob Templeman highlighted the complementary nature of the merger, noting Coral’s online strength and high street presence will bolster Ladbrokes’ established brand. The combined entity will boast a strong digital presence with market-leading technology, aiming to increase its footprint in the online gambling industry, which currently accounts for approximately 20% of their combined revenues.
Internationally, Ladbrokes Coral will operate in the UK, Belgium, Spain, and Australia through existing Ladbrokes licenses. Additionally, Gala Coral’s Eurobet Italia will provide a presence in Italy, offering sports betting, casino gambling, and online poker. Operations from regulated international markets are projected to contribute around 11% of Ladbrokes Coral’s revenues.