CMA clears the way for GVC’s takeover of Ladbrokes Coral
The Competition and Markets Authority (CMA) has cleared the way for GVC Holding’s planned takeover of Ladbrokes Coral after an investigation into whether the merger would lead to a lessening of competition.
The CMA cleared the deal after the investigation this week, saying that the “merger does not give rise to competition concerns” and has confirmed that the case will not be referred for further investigation.
The investigation was announced in February, with the watchdog launching its inquiry early in the month. A consultation period was followed by the decision making process, with the decision being made two weeks before the given deadline.
Both GVC Holdings and Ladbrokes Coral were not worried by the inquiry, stating that the CMA was simply doing its due diligence in what is a landmark merger in the UK gambling industry.
In a statement announcing the ruling, the CMA said:
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 CMA 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.– Statement, Competition and Markets Authority
The news of the inquiry came as Ladbrokes Coral announced that they might have to cut 6% of their workforce due to the takeover. New details of the deal were published, which led to the announcement that jobs in the marketing, customer service and administration departments, mostly in the UK, are likely to be lost.
However, many terms of the deal are still to be negotiated and progress has been slow. While a takeover price of between £3.2bn and £4bn has been agreed, that final price is dependent on the government’s decision on how much to cut stakes on fixed-odds betting machines (FOBTs).
That debate took a potentially big step forward this week after the UK Gambling Commission weighed in with its advice to government. The Commission penned a letter to the Department of Digital, Culture, Media and Sport (DCMS), containing its recommendations on the review of the industry.
The Commission has surprised many by recommending that stakes for non-slot games on FOBTs be cut to £30, rather than the maximum cut to £2 that many campaigners had hoped for. Bookmakers, especially Ladbrokes Coral, who will receive a bigger fee if government agrees with that advice and have the most exposure to FOBT stake cuts, will be rejoicing at that news, though the decision ultimately lays with government and has not yet been reached.