Operator News
UK – Competition watchdog says ‘yes’ to GVC’s purchase of Ladbrokes
By Phil - 22 March 2018
The UK’s competition watchdog has cleared GVC’s acquisition of Ladbrokes Coral following its merger investigation.
The Competition and Markets Authority (CMA) has been carrying out an investigation into the proposed merger. This has found that the merger does not give rise to competition concerns.
The CMA said: “We looked closely at betting services for individual sports and individual games but found that, in all cases, there will be enough rivals to the merged entity to prevent price increases or a reduced quality of service as a result of the merger. GVC has a small presence in the UK and only offers services online. The CMA has found that GVC and Ladbrokes are not close rivals and there are many other providers of betting and gaming services online. The merger will therefore not be referred for an in-depth investigation.”
GVC will now pay £3.2bn for Ladbrokes Coral in cash and shares but the final price is dependent on the future maximum stakes for FOBTs which ministers are currently debating. If the stake is cut to £2 it will pay no more but if the stake is cut to £50 the total cost could increase to £4bn.
GVC Chief Executive Kenny Alexander explained that the deal had been structured in a way to protect the GVC shareholders from the changing landscape for FOBTs whilst rewarding Ladbrokes Coral shareholders if the outcome is better than the worst-case scenario.
He predicted that the FOB maximum stake would be set at between £2 and £20.
“The combination of the two groups will create one of the largest listed sports betting and gaming companies in the world, with an unrivalled portfolio of established gaming brands across international markets,” he said. “This together with our proprietary technology and deep pool of industry talent, leaves us well positioned to further benefit from the opportunities presented by the global gaming market.”
