The Competition and Markets Authority (CMA) today announced it may carry out a 'fast track' investigation into the proposed merger between Ladbrokes and Coral.
Today is the first day of the CMA's investigation to explore the effects on market competition if the two bookies merge as planned. The process normally takes 40 days, but the CMA said it had received a request from Ladbrokes and Coral for a fast track reference to the phase two investigation
“Under the fast track reference procedure, the CMA's investigation timetable is significantly shortened,” its said in its statement, adding if it did proceed, “it would expect to issue its phase one decision within the next 15 working days.”
The fast track procedure was used most recently in the BT/EE merger investigation.
Any merger when a company worth more than £70m is taken over, or if the combined company controls 25 per cent of the market, must be subject to an in-depth phase two investigation.
In July, Ladbrokes confirmed it was merging with its with rival gambling company Gala Coral, which would create a bookmaking giant with a market value worth £2.3bn.
With an expected 4,000 shops, Ladbrokes Gala Coral would overtake William Hill to become the biggest high street betting agent, with net revenues of £2.1bn.
A month ago, the Ladbrokes board lent their support to the merger, saying it would allow the company to accelerate its online growth and operate from an enhanced technology platform internationally, as well as delivering cost savings.
The board spoke out defending the deal after shareholder, and former part-owner of Ladbrokes, Dermot Desmond asked other shareholders to vote against the deal.
He said current chairman Peter Erskine and senior non-executive director John Kelly had led the company down “the disastrous path to a deal that is effectively the death of Ladbrokes as an independent company."