GVC agree to buy Ladbrokes Coral in £4bn deal

January 10, 2018

In the last week of 2017, GVC – which owns Foxy Bingo, Party Poker and CasinoClub, amongst others – agreed to buy its online rival Ladbrokes Coral in a deal worth nearly £4bn.

Previously in 2016 the merger between Ladbrokes and Coral made Ladbrokes Coral the biggest high street bookmaker in the UK, but over the last few years GVC's market share has grown due to a number of shrewd deals. Then, in November 2017, GVC sold its Turkish arm of the business in a deal worth up to £150m.

The sale not only marked a move away from the very profitable ‘grey markets’ – the untaxed and unregulated areas of the world which CitiBank estimated 30 percent of the group's revenue was derived from – but paved the way for this king-making deal.

The takeover of Ladbrokes Coral makes GVC an online gambling giant and sees a move into the high street, as it now has control of Ladbrokes Coral, with almost 3,500 outlets. However, the deal's final worth for GVC and its shareholders is not yet known.

At the end of October, the Department for Digital, Culture, Media and Sport (DCMS) launched a 12-week consultation into cutting the maximum bets from £100 to anywhere between £50 and £2 on fixed-odds betting terminals (FOBTs).

Alongside this, DCMS may later review the spin speed on FOBT games and says it will require gambling companies to take part in a two-year long campaign to promote responsible gambling.  This may spell further costs for GVC having just taken on more than 3000 high street outlets with numerous FOBTs.

The terms of the deal specify the amounts for each share owned by Ladbrokes Coral shareholders; however, the "contingent value right" entitlement will be decided by the outcome of the DCMS review.

Despite fears of disgruntled shareholders, possible profit loss and potential marketing costs from FOBTs and government initiatives, the takeover was called "a truly exciting prospect" by GVC chief executive Kenneth Alexander.

Ladbrokes Coral chairman John Kelly added that the deal would "improve the customer experience, drive faster online growth and build a more diverse and extensive international portfolio of businesses".

Prior to the takeover, GVC already owned: Party Poker; Party Casino; BWIN; Gioco Digitale; Sportingbet; Foxy Bingo; Foxy Casino; Betboo; Gamebookers; CasinoClub.

Through this acquisition, GVC will acquire: Ladbrokes; Coral; Eurobet; Betdaq; Sportium; Gala Casino; Gala Bingo.