Betfred will scoop up 322 shops being sold as part of the Ladbrokes-Gala Coral merger for £55m, Gala Coral announced today.
The gambling giants will sell off 359 high street branches in total if the bookies successfully merge, of which the remaining 37 will go to sports betting group Stan James for £500,000.
In July, the Competition and Markets Authority (CMA) ordered Ladbrokes and Gala Coral to divest 350 to 400 of their more than 4,000 combined branches before proceeding with the £2.3bn deal.
Ladbrokes will divest 185 shops in the agreement with Betfred and Stan James, while Coral will sell 174. The shops generated full-costed earnings before interest, taxes, depreciation and amortisation of £16.8m last year.
The sales must be substantially completed before the merger, which the groups now hope to seal in October, can go ahead.
Proceeds from the disposals will be used to repay debt, Gala Coral said in a statement, and the shops will be transferred on a phased basis if the CMA grants approval to the divestment plan. If the CMA gives it the go-ahead, the merger will be subject solely to the divestiture of "one remaining shop".
Gala Coral chief executive Carl Leaver said:
I am delighted that we have reached agreement with Betfred and Stan James to transfer our shops into their ownership. Whilst other potential purchasers were prepared to pay a significantly higher price, Betfred and Stan James delivered greater certainty which was critical to paving the way for the completion of our merger with Ladbrokes.
Subject to CMA approval, we now hope to complete the merger before the end of October so that we can begin to realise the significant value available to both company's shareholders.
The Ladbrokes Coral tie-up follows the merger between Paddy Power and Betfair, announced last September, that completed in February.
Rival bookie William Hill has been the latest to announce it is looking to join the wave of consolidation in the gambling industry and is currently eyeing up a multi-billion pound merger with Canadian online operator Amaya.