The UK is about to get a new largest bookmaker after Ladbrokes and Gala Coral announced that they are planning to merge, creating a company worth £2.3 billion.
The companies said the deal, which has been under discussion since last month, would allow them to strengthen their online businesses - a major growth area - and achieve cost synergies of £65 million per year.
The combined entity will have net revenue of £2.1 billion and earnings before interest, taxes, depreciation and amortization of £392 million.
New Ladbrokes chief executive Jim Mullen will run the merged firm, which will be called Ladbrokes Coral.
Chairman of Ladbrokes, Peter Erskine, said: “This is a major strategic step for Ladbrokes which firmly accelerates our strategy to improve the customers' experience and build recreational scale.”
His counterpart at Gala Coral, Rob Templeman added: “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.”
Under the terms of the deal Ladbrokes will issue new ordinary shares to existing Coral shareholders that will account for just over 48% of the new company.
Ladbrokes shareholders will then own the remainder of the firm.
Ladbrokes will help fund the deal through a share placing of 93 million new shares, around 10% of the company.
Ladbrokes shares were down 0.5% to 127.69p in early trading.
Additional reporting by ReutersReuse content