Share prices in betting company Ladbrokes rose more than 11% on Friday morning as a report by the Competition and Markets Authority (CMA) gave a big indication that a merger with rival Gala Coral could go ahead.
The CMA said that due to competition concerns “around 350 to 400 shops may have to be sold for the merger to be conditionally cleared.”
Ladbrokes and Coral are the second and third biggest betting companies in the UK, respectively. Ladbrokes has 2,231 betting locations in the UK, while Coral has 1,850.
Their combined total would surpass the current market leader William Hill, which has almost 2,400 stores.
Martin Cave, Inquiry Chair of the CMA, said that although online betting had “grown substantially” in recent years, the evidence suggests that many betting customers still used physical locations:
“For these customers, competition comes from the choice of shops in their local area and it’s they who could lose out from any reduction of competition and choice. Discounts and offers of free bets to individual customers are ways betting shops respond to local competition which could be threatened by the merger.
“We’re also concerned that such a widespread potential reduction in competition at the local level could worsen those elements that are set nationally such as odds and betting limits.”
Ladbrokes told Business Insider that “this is a significant milestone and our focus now will be on completing the shop disposals that the CMA have indicated they require.”
Gala Coral also released a statement this morning saying that it will “continue to work with the CMA in order to agree the remedies.”
Here’s a look at Ladbrokes’ rocketing share price on Friday morning, as of 9.50 a.m. BST:
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