GVC Holdings and Ladbrokes Agree $5.35bn Merger Deal

admin, December 26, 2017 12:20 pm

GVC Holdings and Ladbrokes Agree $5.35bn Merger DealFollowing two unsuccessful attempts over the past year, GVC Holdings has finally clinched a deal to acquire rival firm Ladbrokes Coral Group for an estimated £4bn ($5.35bn).
The UK’s gambling industry has been growing exponentially since The Gambling Act of 2005 liberalized the market, with its online betting sector also benefitting from an influx of younger customers using smartphones and tablets to place their wagers on live sports.
This in turn has resulted in a series of consolidations and mergers within the industry, and in 2016 GVC acquired bwin.party for around £1.1bn ($1.7bn). That same year, Ladbrokes Coral also merged with Coral to supplant William Hill as the UK’s largest bookmaker, and once finalized, the latest deal between GVC and Ladbrokes Coral will create a company that will rank amongst the country’s largest businesses.
Commenting upon the deal, Ladbrokes Coral CEO John Kelly said that it would help improve the company’s customer experience, accelerate online growth, as well diversify and extend its international business portfolio. Meanwhile, GVC’s CEO Kenny Alexander expressed his enthusiasm for the merger, stating:
“The creation of one of the world’s largest listed sportsbetting companies, combining a portfolio of established brands, proven technology and leading market positions in multiple geographies, is a truly exciting prospect.”
Another benefit of the deal is that it is expected to result in annual pre-tax cost savings to the new company of more than £100 million per year.
The final price, however, will be determined pending a review by the UK government as to a reasonable maximum stake to set for fixed-odds betting terminals (FOBTs). Last year, Ladbrokes Coral collected around £800 million from these type gaming machines placed at its high-street bookies, but that figure is likely to take a considerable hit if the Department for Digital, Culture, Media & Sport (DCMS) decides to cut the maximum bet on FOBTs from their present £100 per spin to as low as the £2-£50 range.

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