GVC takeover of Ladbrokes Coral to be examined by competition authority
The potential acquisition of Ladbrokes Coral by GVC Holdings, which would create a massive gambling company, is to be investigated by the Competition and Markets Authority, it was revealed on Wednesday.
GVC, owner of the bwin.party and Sportingbet brands, had long been linked with the mammoth merger and was revealed to be in detailed discussions to combine the businesses in December.
Later that month, Ladbrokes Coral agreed to the terms of the takeover for a deal that could be worth up to £4 billion.
The acquisition was expected to be completed by the end of the first quarter of 2018 or early in the second quarter, but will first be examined by the CMA, which has set a deadline of February 21 for comments, with a decision expected on April 6.
When Ladbrokes and Coral merged in 2016 the CMA also analysed the deal before giving its approval, which resulted in 360 of the pair's betting shops being sold.
It is thought the CMA's interest in GVC's takeover would focus on the online market.
Donal McCabe, Ladbrokes Coral's group communications director, said: "This is a process you have to go through on any deal and we're not aware there would be any competition issues."
A member of the FTSE 250 and a superpower in the gambling industry with a worldwide presence, GVC is run by chief executive Kenny Alexander, who in December hailed the possible takeover, saying at the time: "I think we have got fantastic people at senior management level on both teams, great technology, great brands and we have got a fantastic opportunity.
"It would be a very, very brave man or woman that would bet against us delivering shareholder returns based on our historical performance. I think we have done it before and I think we are definitely going to do it again."
The final price of the purchase will depend on the government's review of FOBT stakes, which new culture secretary Matt Hancock is reportedly in favour of limiting to a £2 maximum.
The betting industry has been transformed by takeovers in recent years
William Hill and GVC agree joint-takeover bid for Sportingbet, with Hills taking on the Australian and Spanish business and GVC the operations in unregulated markets. The deal is completed the following year.
Sky agrees to sell its controlling stake in Sky Bet to private equity firm CVC Capital in a deal that values the business at £800 million.
In February, takeover talks between William Hill and online operator 888 collapse after one of 888's founders refuses to back the £700m deal.
In June, the Racing Post breaks the news that Ladbrokes and Coral are in merger talks. The £2.3 billion merger is finally completed in November 2016.
Later that summer, Paddy Power and Betfair agree a deal worth more than £6bn. The merger is completed the following February.
In the autumn, GVC beat off competition from 888 to acquire bwin.party.
Elsewhere in the industry, Unibet – now Kindred Group – buy the Stan James online brand.
In August, Rank Group and 888 abandon a £3bn takeover bid for William Hill.
In October, William Hill walk away from talks over a £4.6bn merger with gaming group Amaya after shareholder unrest.
In June, Kindred Group completes £175m acquisition of online gaming company 32Red.
In December, GVC and Ladbrokes Coral confirm they are in takeover talks.
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