One of the most reputable UK bookies Ladbrokes agrees to a merger with Gala Coral in a £2.3 billion deal in attempt to surpass William Hill, which currently is the leader on the market.

The latest deal on the UK gambling market has been struck just a couple of days ago when Peter Erskine, Chairman of Ladbrokes, commented on the merger as being a “major strategic step”. The combined business will certainly give a competitive edge to Ladbrokes Coral (as the new company will be called) because the 1,845 shops of Coral will be added to the 2,100 shops of Ladbrokes. By comparison, William Hill have 2300 shops across the UK. However, it is expected that the regulator will demand that some shops are sold in the areas where they overlap to meet the requirements of the Competition Market Authority (CMA). The consolidation of their business in a Combined Entity comes as no surprise. After the changes in the UK Gambling Law, which impose higher taxes and stricter regulation, acquisitions and mergers are the logical step for the operators so that they keep their positions on the market.

Gala Coral is owned by a group of private equity firms, including Apollo Global Management, Anchorage Capital Partners and Cerberus Capital Management, amongst others. After the deal, Gala’s present shareholders will receive 48.25% of the expanded company, whereas Ladbrokes will own 51.75%.

To fund the merger Ladbrokes will have to place 93 million new shares, which represent 10% of the company.

Ladbrokes Coral will be lead by the current Ladbrokes CEO Jim Mullen, while Gala Coral CEO will assume a new role, that of an Executive Deputy Chairman. In a press release Peter Erskine says: “Together, we will create a leading betting and gaming business combining strong brands with an attractive multi-channel offering and an extensive national and international coverage. “