Ladbrokes to buy Gala Coral – Would create $3.6 Billion iGaming Company

For years, Ladbrokes and Gala Coral have been rivals in the European gambling market. However, recent reports indicate that Ladbrokes is set to buy the bulk of Gala Coral, which would create a gambling company worth $3.6 billion (£2.1b).

Assuming Ladbrokes closes the deal, they would get Gala Coral’s retail sports betting operations in Britain and Italy. Based on current projections, the new company, Ladbrokes Coral, would earn £2.1 billion a year.

“This is a major strategic step for Ladbrokes which firmly accelerates our strategy to improve the customers’ experience and build recreational scale,” Peter Erskine, Ladbrokes CEO said.

The last step for the deal involves the shareholders confirming it, which is expected to happen. Under the proposal, Gala Coral would receive new shares and retain a collective 48.25% of the company.

As for Ladbrokes, they will acquire most of Gala Coral’s portfolio, which includes sports betting parlors in 1,840 British locations and 870 Italian locations.

Ladbrokes is relatively the same size with 2,700 locations in Belgium, Ireland, Spain and Great Britain. Last year they reported a net revenue of £1.16 billion.

“Together, the two businesses will have a strong digital presence with market-leading technology, innovation and access to significant resources to drive continued growth and deliver enhanced returns for all shareholders,” said Rob Templeman, Gala Coral CEO.

If the deal is completed, Ladbrokes will assume £865 million of Gala Coral’s debt, giving the Ladbrokes Coral company a combined debt of £1.3 billion. The new company would also expect to save about £65 million in costs by combining with each other.

The timing of this deal is interesting, given that it was just a week ago when 888 Holdings won a bidding war against GVC to purchase Bwin.Party Digital Entertainment for £893.3 million. This not only gives 888 Holdings control of Bwin.Party’s European operations, but also their stake in the American regulated online gaming market, which, although small right now, could amount to a very profitable investment down the road.

As for the future Ladbrokes Coral company, they have no immediate plans to enter the American market. However, this isn’t to mean that they won’t one day explore the U.S. online gaming option down the road.