Talks are taking place over a proposed merger between Ladbrokes and Gala Coral, two of the UK’s biggest names in gambling.
A combination of the two would produce one company large enough to challenge William Hill, the biggest player in the betting business.
Cost savings are cited as the principal reason or the proposed merger and the unified company would be better placed to face up to the storm of new gaming taxes which are now facing the business. Ladbrokes is the second largest bookmaking company in the UK and Gala Coral third. They would be able to link their digital business profitably in face of declining footfall at bookmakers’ shops when gamblers are turning more to their tablets and mobile phones for betting.
Ladbrokes chief executive Jim Mullen said that his focus had been on a “more aggressive plan to build digital scale and grow our recreational customer base across all channels, which is a key to creating a more sustainable and growing Ladbrokes.” He said that his plans were well advanced and he would soon present them to shareholders.
Mullen went on to describe a merger with Gala Coral as a move which would “create a combined business with significant scale and has the potential to generate substantial cost synergies, creating value for both companies’ shareholders.”
Mullen became CEO at Ladbrokes only in April. He said that if the merger talks showed signs of success he would delay the announcement of his proposed strategic review, which is due on June 30.
Gala Coral has recently been engaged in selling off its bingo clubs ahead of a public offering.
