GVC Ladbrokes Takeover Cleared by UK Competition Regulator
Posted on: March 24, 2018, 05:00h.
Last updated on: March 24, 2018, 10:40h.
Online gambling giant GVC Holdings has cleared one of the final hurdles in its proposed takeover of UK bookmaker Ladbrokes Coral.
The UK competition regulator, the Competitions and Market Authority (CMA), this week approved the merger that would create one of the world’s largest publicly traded betting companies.
Competition laws exist to prevent companies from becoming monopolies or too dominant within one market to the detriment of the consumers. But the CMA said that the companies were significantly different in the services they offered and, as such, the proposal did not warrant concern.
Ladbrokes Coral is the UK’s largest land-based retail bookmaker, while GVC has limited business in the UK and operates largely online. They are not close rivals and meanwhile consumers in the UK market have a large pool of betting and gaming websites to choose from, the regulator said.
Shareholders on Board
“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,” said the regulator.
GVC recently won the unanimous backing of Ladbrokes’ Coral shareholders for a cash and paper deal worth £3.2 billion ($4.53 billion). That figure has the potential to rise to £4 billion ($5.66 billion) if the UK government chooses against a dramatic cut on the maximum stakes of fixed-odds betting terminals.
The merger will create a combined company with a market capitalization of £5.3 billion ($7.5 billion) that will join Paddy Power Betfair in the FTSE 100 – the only two gambling operators on the list of the UK’s top 100 public companies.
The Rise and Rise of GVC
For a company whose market cap was £100 million ($142 million) five years ago, GVC’s rise to industry heavyweight status has been eye-popping, achieved through an aggressive and ambitious acquisition strategy. In 2012, it acquired Sportingbet and in 2016, bwin.party, for $1.6 billion, following a protracted bidding war with 888.
Because of these deals it now owns some of the best known online gambling brands in the world, from partypoker to FoxyBingo.
“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,” said GVC chief Kenny Alexander, recently.
“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.”
Related News Articles
Related News Articles
- September 9, 2020 — 183 Comments—
- September 19, 2020 — 28 Comments—
- September 25, 2020 — 14 Comments—