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Ladbrokes -Coral Merger Talks Collapse Sending Share Price Tumbling

The much talked about rumor mergers between Ladbrokes Coral Group and GVC have collapsed according to reports in the Financial Times. Initially the share price of both companies were boosted but news of the failed merger sent Ladbrokes- Coral’s share price tumbling by over 9 percent.

The merger would have been one of the largest deals in the gaming industry and come after the £3.2 billion merger between Ladbrokes and Coral earlier this year. The consolidation of major companies in the gambling sector is one of the main trends that took effect in 2016 and will probably continue in 2017.

The increase in tax and tighter regulations in place mean that gaining and securing market share is that much more difficult for smaller companies and the creating of larger companies enables much more scale to grow.

Analysts like David Jennings at Davy Research believe that the pattern of consolidation is at the core of the gambling sector at present. Jennings said,” Consolidation is front and centre of everything in the gambling sector right now, and even early-stage talks are taken seriously by the market. What we saw today with Ladbrokes was the unwinding of expectations on Friday. With so much focus on incoming legislation, scale is important.”

Author: Victor

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